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Selling costs are incurred under monopolistic competition to:

A. Attract more customers

B. Prevent its customers from going to others

C. Establish superiority of its product on the others

D. All of the above

Correct Answer : D.


Selling Cost? In economics, the total amount of money spent on advertisement and publicity for pushing the sale of the product is called selling cost. The need for incurring selling costs is acutely felt under monopolistic competition. In case of perfect competition, products of all producers are homogeneous, so, they do not feel necessity of any advertisement. Thus selling cost influences the determination of price under imperfect competition.}

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