Colgate should spend more on advertising than Coca-Cola

The Demand Curve that Crest (the toothpaste company) faces is flatter than the Demand Curve that Coca-Cola faces. Why, or why not? Make sure to provide supporting arguments.

Colgate should spend more on advertising than Coca-Cola, if we consider the advertising expenditures as a percentage of sales. Why, or why not? Data suggests that Coca-Cola’s spending on advertisement as a percentage of sales is higher than that of Colgate. What could explain the difference? Illustrate with at least one example from a recent advertisement (on TV, radio, etc.)

Describe two different aspects in which a monopolistically competitive firm behaves like a perfectly competitive firm.

Evaluate the statement and explain why it is correct or incorrect: “The existence of excess capacity makes a monopolistically competitive firm resemble more a perfectly competitive firm.”

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