Question

Now suppose that the shoe industry is not a monopoly, but monopolistically competitive. In the long run, without advertising their shoes, what is expected to happen to Zappateria

Answer 1

their sales will not be affected by much

Step-by-step explanation:

In a monopolistic competition such as this one, many producers sell products that are slightly different from each other and hence are not perfect substitutes. Therefore, if Zappateria does not advertise their shoes, in the long run, their sales will not be affected by much. That is because their competition is attracting customers to the market itself and customers will buy from Zappateria due to the differences in the product's specifications.