Find an industry that spends a large amount on advertising. What affect is advertising competition likely...

Find an industry that spends a large amount on advertising. What affect is advertising competition likely to have on the number of firms in the industry?
Which industry is more concentrated, the US market for cellular service or the market for internet search engines? Explain your answer.

Expert Solution

The example of an industry which spend a large sum on advertising is Footwear industry where the market structure is an Oligopoly and few firm dominate the markets with slightly differentiated products like Adidas,Nike and these firms hold the considerable market power with them in form of the consumer loyalty they have been able to generate during the period. The advertising competition between the firms of the footwear industry and the marketing budget increases the barrier to entry and reduces the competition frm new entrant because of the large investment required in for of advertising and marketing vost so as to get customer attention

The US internet search engine is close to being a monopoly with Google almost holding close to 90% market share followe long way behind by Bing or Yahoo in single digita where the oligopoly competition is intense in cellular market with AT&T havin market share close to 40%, Verizon 30 % followed by T mobile sprint. Hence,the US internet search engine market is more concentrated with HHi of over 90^2=8100.

Rahul Sunny answered 8 months ago

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