Question

In which of the following product markets are we likely to observe the largest amount of advertising?
a. perfectly competitive markets markets in which industrial products are sold
b. markets with highly differentiated products
c. markets in which there is very little difference between different firms' products

Answer 1

Answer: Option (c) is correct.

Explanation:

Correct option: markets in which there is a very little difference between different firm's products.

Differentiated products are the products which are similar in nature. It is very difficult to differentiate among the products of two firms. Example of differentiated products are coffee; there are two brands of coffee, Bru and Nescafe.

So, there is need of advertisement to showcase unique products features to the consumers and create brand image for the product.