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State with reasons whether you agree or disagree with the following statements:Selling cost is incurred by a firm in Monopolistic Competition.ORIn Monopolistic market, the selling cost is must. |
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Answer» Yes, I agree with this statement. Selling cost is incurred by a firm in Monopolistic Competition because: 1. Monopolistic competition is a market where there are many sellers selling differentiated products which are substitutes for each other. 2. So there is an element of ‘Monopoly’ and ‘Competition.’ 3. There is keen competition among group of monopolists producing same, though not identical product. So selling costs are incurred to increase the demand for the product. 4. Selling costs are those costs which are incurred by the firms to create demand and increase the demand for its product through advertisements, publicity, salesmanship, etc. 5. The main purpose of selling cost is to push up the sales of the product. 6. The buyers in this market buy the product not by chance but by choice and preference. The advertisements, salesmanship etc can change the preference of the consumer towards their product. |
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