forcing them to do so. Moreover, they argue that consumers benefit substantially when firms seek short-term

profits by providing differentiated products. This controversy may never be fully resolved, in part because

deciding on the optimal amount of variety is very difficult, and in part because the two sides often place

different values on what variety means for consumers. Read the following Clear It Up feature for a discussion

on the role that advertising plays in monopolistic competition.

CLEAR IT UP

How does advertising impact monopolistic competition?
The U.S. economy spent about $180.12 billion on advertising in 2014, according to eMarketer.com. Roughly one

third of this was television advertising, and another third was divided roughly equally between internet, newspapers,

and radio. The remaining third was divided between direct mail, magazines, telephone directory yellow pages, and

billboards. Mobile devices are increasing the opportunities for advertisers.
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