M4 Discussion Topic



Listed below are possible discussion topics for this module, but if you have personal experiences or examples that relate to the topics presented in the assigned readings, please feel free to add those to this discussion as well. In developing your thoughts and opinions here, please look to incorporate citations and statistics both from the textbook and other outside sources. Lastly, let’s always remember to keep these discussions civilized and respectful, even when we disagree on certain topics.

Module 4:
1.Time for an honest moment here, stop and think about how much advertising influences your consumption decisions. When is the last time you can remember choosing one product over another because of advertising?
2.What role does advertising play in influencing consumption in monopolistic competition? Does the impact of advertising allow for some price leverage by firms in this market structure? Why or why not?
3.Is the United States truly an economy that promotes competition? Think about the markets where major oligopolies exist, for instance soft drinks/fast foods and automobile manufacturing, is there really a free market place or do oligopolies/major corporations dominate our economy?
4.Why is the government so quick to regulate monopolies and potential monopolies? What are the major concerns that arise from this market structure?





Repeatedly, advertising is used to entice the consumers towards buying a particular good or service. Advertising plays a critical role in improving market penetration and improving top of mind awareness of the customers to particular brands. The adverts are “packaged” in such a way that the buyers can hardly resist them. They are so appealing to the eye leaving no room for criticism. Many a times, consumers find themselves basing their decisions on the adverts they encounter (Morgan, 2011).

Morgan (2011) explains that branding and advertising have come in handy especially in the monopolistic market competition. This inference is because every organization wishes its products dominates the market. Enjoying such a monopoly in the competitive market requires a firm to differentiate its merchandise from those of its competitors. Through advertising, a company can promote its product quality. The consumers get informed of the availability and benefits of the goods thus reducing selection costs.

The United States embraces an oligopolistic type of market. Over the years, the state has enjoyed a dominant position in the global market due to the diversity of its market. Many companies exist and share a common market. Thriving in such a free marketplace necessitates firms to advertise to inform customers the uniqueness of their products and hence attract a larger market (Fudenberg & Tirole, 2013).

However, the government is so keen on regulating the current and potential monopolies from the market to protect consumer interests. The major reason for regulating monopolies is to minimize their market control. A firm enjoying monopoly may charge its consumers higher prices than is required for inferior goods and services since they act as price setters. Also, Fudenberg and Tirole (2013) explains that monopoly firms often ends up providing substandard goods and services. The government plays a key role in regulation through initiatives such as price capping, promoting benchmark competition, regulating the quality of services rendered and investigating mergers by establishing policies among many others.













Fudenberg, D., & Tirole, J. (2013). Dynamic models of oligopoly. Taylor & Francis.

Morgan, J. M. (2011). Brand Against the Machine: How to Build Your Brand, Cut Through the Marketing Noise, and Stand Out from the Competition. John Wiley & Sons.

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