Firms undr monopolistic competition spend huge amount on advertisement. It is left desirable by the firms to make people aware of the new products available end also to create brand image in the mind of consumers. Is it justified ?

Firms undr monopolistic competition spend huge amount on advertisement

1.	Firms undr monopolistic competition spend huge amount on advertisement. It is left desirable by the firms to make people aware of the new products available end also to create brand image in the mind of consumers. Is it justified ?
Answer» Solution :It is not always justified. As far as selling COSTS aer incurred to give information or create AWARENESS or to persuade consumers of distinctivencess of the product, it is desirable. If it turns defensive and firms start incurring huge amount of money increasing their total cost then it is not desirable because this high cost is passed on to CONSUMER in the from of high prices.