Q. Show the Advertising effects on Competition?

Advertising promotes competition between different brands of the same product. The company offering high-quality quality products at reasonable price often gets advantages in the competition. Through advertisements company is able to communicate its reasonable price, good quality, sales promotion schemes and advertising appeals to the target customers. When one advertiser commences such schemes other advertiser also follows it. It endorses competition.

Critics quarrel that large firms creates barriers to entry of new firms as these large firm enjoy economies of large scale and be able to afford costly and efficient media for advertising.