Why do oligopolists advertise but perfectly competitive firms generally do not?

1 Answer | Add Yours

literaturenerd's profile pic

literaturenerd | High School Teacher | (Level 2) Educator Emeritus

Posted on

One could only assume why some businesses choose to advertise while others do not. That said, oligopolies are those companies and businesses which offer products and services which fail to create a definitive need in any given market. Given that the competition of products and services they provide are relatively small on the overall market, advertising allows them to get out both their name and their product.

This said, the advertising is essential to their success. Consumers may not be aware of the services and products offered outside of advertising. The products and services provided by oligopolies are typically unsought products (needed for special occasions/functions) or specialty products (typically expensive and high end products) and shopping products (which are products which consumers research for the best deals, qualities, and services). This said, the advertising of these types of products are necessary given the specialty market they typically fill.

Sources:

We’ve answered 318,957 questions. We can answer yours, too.

Ask a question