Question

Why is advertisement cost high in olidopoly and monopolistic

Answer 1

$\bf {Oligopoly}$ is a form of market in which there are few big firms obtaining huge importance in the market.

In Oligopoly market, all the firms are the competitors of each other. Their's commodities are of almost close substitutes thus there's high advertisement cost. The firms can sell their commodities by the high advertisement cost. The price policy cannot work in this situation because all other firms are sharp competitors.

$\bf {Monopolistic}$ is a form of market where there are number of buyers as well as sellers, selling differentiated commodities.

In monopolistic market, advertisement cost is high because all the firms in the market need to sell their goods at the same price level. To avail maximum profit, firms sell maximum good at the same price level and this is only possible with high advertisement cost.

Answer 2

Answer:

$\huge  \boxed {&#10029\red{Answer~}&#10029}$

olidopoly is a form of market in which there are few big firms obtaining huge importance in the market.

In Oligopoly market, all the firms are the competitors of each other. Their's commodities are of almost close substitutes thus there's high advertisement cost. The firms can sell their commodities by the high advertisement cost. The price policy cannot work in this situation because all other firms are sharp competitors.

Monopolistic is a form of market where there are number of buyers as well as sellers, selling differentiated commodities.

In monopolistic market, advertisement cost is high because all the firms in the market need to sell their goods at the same price level. To avail maximum profit, firms sell maximum good at the same price level and this is only possible with high advertisement cost.