Advertising in Monopolistic Competition and Oligopoly

Advertising in Monopolistic Competition and Oligopoly Monopolistic Competition Advertising is a technique used by firms in monopolistic competition to create product differentiation and gain some control of the market, and as a result, charge a higher price. Excessive advertising will serve to inform consumers about the physical difference in the product and the perceived difference will lead to increased product differentiation.Advertising We will write a custom essay sample on Advertising in Monopolistic Competition and Oligopoly specifically for you for only $16.05 $11/page Learn More If advertising convinces customers that the product is superior to the competitor’s then the firm would charge a higher price (Arnold 241). Advertising will increase demand and reduce demand elasticity. The current profit maximizing output is given by Q at a price P; therefore, advertising will increase the quantities of the product the consumers are willing to purchase leading to a shift or a move in the demand curve t o a higher level. The new demand curve will correspond to higher levels of quantity demanded and the prices given by Q1 and P1 (Arnold 245). In a monopolistic competition the firm faces a comparatively elastic demand, and this limits the prices that can be charged on the product. In order to reduce demand elasticity, the demand curve will be relatively steeper implying that consumers are likely to change their quantity demanded as a result of a change in price. As illustrated in the diagram the firm can now charge a slightly higher price P1 for the same quantity, this means the firm can collect more revenues for the same quantity Q sold at a profit maximizing level of output (McConnell and Brue 494). However, a firm cannot maximize profit when faced with inelastic demand because the marginal revenue (MR) is negative, implying that the marginal cost (MC) would be negative. Such a situation is not possible, where marginal revenue (MR) and marginal cost (MC) are both negative (Arnold 2 46). Excessive advertising could lead to inelastic demand and the firm will have to increase the price in order to make demand elastic because profit is not maximized when demand is inelastic. (McConnell and Brue 489). Advertising is expensive, and the firm will keep on advertising as long as the revenues generated from advertising are more than the cost of advertising. As a result of advertising, demand may increase and become inelastic, and, on the other hand, the marginal cost (MC) and average cost (AC) are likely to rise at the same time. Advertising in a monopolistic competition is excessive and as long as revenues per product are more in comparison to increase in average cost per product it may not result in loses. Firms in a monopolistic competition market will use advertising to maintain its profits because advertising affect the products of the firm by increasing its demand.Advertising Looking for essay on advertising? Let's see if we can help you! Get your first pa per with 15% OFF Learn More Oligopoly The Oligopolist can increase its market share through advertising, and they compete on the basis of advertising rather than on pricing (McConnell and Brue 492). Excessive advertising by the Oligopolist is used as a barrier against entry of other firms. It is also used to inform consumers of new products in the market. Advertising also leads to increased output pushing down the average total cost (ATC) curve towards the productive efficiency point, where average total cost (ATC) is minimum. Advertising may also lead to manipulation as opposed to informing consumers. In order to understand the interdependence behavior of oligopolistic firms the technique of game theory is used as illustrated in the diagram, it shows that the two firms are better off colluding than competing. At the top left shows that both firm A and B could earn 200 dollars profit each if they choose to advertise. At the right lower quadrant, the two firms can re ceive 250 dollars each if they both choose not to advertise, because there are no costs for advertising (McConnell and Brue 496). At the lower left quadrant firm B decides to advertise while firm A does not advertise and, therefore, firm B will earn 350 dollars profits and firm A earns 100 dollars profits. This is because advertisement attracts customers from firm A to firm B. At the top right quadrant firm B does not advertise while firm A decides to advertise, therefore; firm A receives 350 dollars profits while firm B receives 100 dollars in profits because customers are attracted away from firm B. On the other hand, if the two firms chose to collude to advertise they would each receive 250 dollars profits. In oligopoly, there are few dominant players in the market and each cannot fully influence the market independently unless they collude to influence and affect the price and demand. Advertising in an oligopolistic firm is used to increase both market share and total demand.Adv ertising We will write a custom essay sample on Advertising in Monopolistic Competition and Oligopoly specifically for you for only $16.05 $11/page Learn More In an attempt, to gain bigger market share Oligopolist will engage in fierce advertising competition trying to outdo each other. (McConnell and Brue 494). This scenario makes advertising in the oligopolistic markets to be extremely high. It is difficult to tell if advertising leads to in improved consumer benefits and efficiency. However, if advertising results to more sales and increased output, this could lead to efficiency of the firm. It is costly to advertise and may lead to improved efficiency if costs are less than the benefits from sales. Advertising may have no direct relation with the benefits to the consumer, however, if increased sales arising from advertisement leads to reduced prices, then customers will enjoy some benefits (McConnell and Brue 487). Arnold, Roger A. Micro Economics. 10t h ed. Washington, DC: Cengage Learning, 2010. Print. McConnell, Campbell R. and Stanley L. Brue. Economics: Principles, Problems, and Policies. New York, NY: McGraw-Hill/Irwin, 2005. Print.

Definition Essay Samples How to Write an Essay about Euripides’s Medea

Definition Essay Samples How to Write an Essay about Euripides’s Medea Free example essay on The Alienation of Medea: In Euripidess Medea, Medea is continuously expressed as an outsider with separate characteristics than that of the general public and because of this is alienated from the society around her. Many different attributes add up to this exile from her country and others. The fact that she is woman and foreign has much to do with her isolation.During Ancient Greece times, foreign residents were encouraged to come to Athens but were rarely admitted to the rights of full citizenship, which was a jealously guarded privilege (Warner footnote 2, p. 700). Since the Athenian rights and regulations were made for men, the women had few privileges and almost no legal rights (Warner footnote 3, p. 700). In fact the male foreigner had more privileges then the local woman (Euripides p. 694). Medea only sought for the rights of everyone else and because of that she was considered different and was avoided by others. Men were to be above the women, but Medea knew she had to rise above to get exactly wha t she wanted so she struck out in manners not normal of women and was feared by many. This is the reasons of her distress and the tragic ending that followed. Medea is the story of how the loss of love and the separation from others can turn to death and catastrophe. Not only a woman and a foreigner, Medea is faced with many other civilian haunting characteristics such as sorcery, intelligence and cleverness. In the beginning her nurse states, Shes a strange woman (Medea ln. 44, p. 696). The nurse also warns Medea of her own nature, be careful of the wildness and bitter nature of that proud mind (Medea ln. 102-104, p. 697). By fault, Medea is no idiot and realizes why she is alienated by others. While speaking with the chorus of Corinthian woman she focuses on her lifestyle of isolation, and those who live quietly, as I do, get a bad reputation (Medea ln. 215-216, p. 700). Medea knows as a foreigner, she must adapt but still she will always be judged by her past mistakes and history. She declares this while continuing to address the chorus: Yet what applies to me does not apply to you. You have a country. Your family home is here. You enjoy life and the company of your friends. But I am deserted, a refugee, thought nothing of by my husband, something he won in a foreign land. I have no mother or brother, nor any relation with whom I can take refuge in this sea of woe (Medea ln. 250-256, p. 700). Medeas state of estrangement is made clearer with the entrance of Kreons character. He insultingly calls her an exile (Medea ln. 271, p. 701) instead of her name while speaking to her. In fact, she is being exiled in the first place because of her threatening manor since she is a clever woman, versed in evil acts (Medea ln. 283, p. 701). Women in those days were known not for their ideas or for being outspoken, therefore since Medea possessed both of these qualities, she was intimidating to others. Kreon expresses how he is afraid (Medea ln. 280, p. 701) of Medea because he hears that she is threatening (Medea ln. 285, p. 701). In her defense, Medea conveys, a person of sense ought never to have his children brought up to be more clever than the average (Medea ln. 250-256, p. 701), as if being intellectual is wrong if you are a woman. In addition, Medea adds, for being clever, I find that some will envy me, others object to me (Medea ln. 301-302, p. 701). Kreon brings logic to the hy steria over an intelligent woman with one of his finals statements, A sharp tempered women, or for that matter a man, is easier to deal with than the clever type who hold her tongue (Medea ln. 316-318, p. 702). Nonetheless, Medea is still driven from Corinth despite of her best efforts. The chorus illustrates her emotion, and now in a foreign country you have lost your rest in a widowed bed, and are driven forth, a refugee in dishonor from the land (Medea ln. 424-427, p. 704). Still, Jason comes to help reiterate why exactly Medea is being exiled. You are going to be exiled for your loose speaking (Medea ln. 439, p. 704), and once again Medea is ill-spoken of because she speaks. On her guard, Medea retaliates, for this is my position, hated by my friends at home, I have, in kindness to you, made enemies of others whom there was no need to have injured (Medea ln. 494-496, p. 705). Furthermore, Jason continues to throw insults by calling Medea a mouthing tempest of your bitter tongue (Medea ln. 513, p. 706), as well as including the fact that all the Greeks considered her a clever woman (Medea ln. 527, p. 706). With Jasons verbal abuse over her free speech, Medea begins to understand why exi le seams like the best answer, for she will be quiet without friends (Medea ln. 501. p. 706) when banished. She also recognizes how much better it will be for Jason when she is gone since [he] thought it was not respectable as [he] got on in years to have a foreign wife (Medea ln. 579-580, p. 707). Also Jason can throw out insults because he has family and friends to go to. Medea knows this and expresses her feelings with: You can insult me. You have somewhere to turn to. But I shall go from this land into exile, friendless (Medea ln. 591-592, p. 707). Medea proves how ancient times strived for a conventional lifestyle where women and children should be seen and not heard, rather than allowing them rights to be outsiders with minds and opinions. With each character that felt threatened by Medea, came the same reasons for her intimidating behaviors: intelligence, out-spoken, will power, sense of witchcraft, love and cleverness. In the end, past her struggles, Medea still ended up alone and separated from others. She questioned her outcome earlier, What profit have I in life? I have no land, no home, no refuge from my pain (Medea ln. 782-783, p. 711). Still, whether Medea is sincerely evil or abnormally educated, the people of society abandoned her because of her characteristics that set her apart from others. Because of these attitudes, Medea was an outcast to her surrounding societies, no matter where it was. Because of Medias alienation, it did not matter what she did since she was always going to be looked at as an exile or foreigner. This had a lot of impact on the closing of the story. Like Euripides himself, Medea seemed to have lived a private, an intellectual life (Euripides p. 693). Medea could have been Euripides way of expressing some of his own anguish about being an outsider himself. However, Medea went to the extreme by killing her children and the king and daughter. Maybe, if she was not so isolated from the society she was in, then she could have someone on her side to fight on her behalf and the conclusion of the story could have been different, but since she was alone, she had nothing to loose. Therefore, this story comes with many morals; A warning to the cheating husband, as well as, a reminder to people that to the world you may be just one person, but to one person, you may be the world.