By advertising, a monopolistic competitive firm tries to shift its
Answer Details
A monopolistic competitive firm tries to shift its demand curve to the right by advertising. This is because advertising helps to create a differentiated brand image for the product, which makes consumers willing to pay a higher price for it. As a result, the demand for the product increases, and the firm can sell more of its product at a higher price, thereby increasing its profits. On the other hand, advertising does not directly affect the supply curve, which is determined by the firm's production costs and technology.