1. Colgate ( the tootpaste company) should spend more on advertising than Coca-Cola, if we consider the advertising expenditures as a percentage of sales. Why, or why not? Data suggests that Coca-Cola's spending on advertisement as a percentage of sales is higher than that of Colgate. What could explain the difference?
2. Provide one argument pro and one against advertisng. Illustrate with at least one example from a recent advertisement (on TV, radio, etc.)
3. Describe two different aspects in which a monopolistically competitive firm behaves like a perfectly competitive firm.
4. Evaluate the statement and explain why it is correct or incorrect: "The existence of excess capacity makes a monopolistically competitive firm resemble more a perfectly competitive firm."