Read the following statements - Assertion (A) and Reasoning (R):
Assertion: Monopolistic competition involves aggressive advertising by firms.
Reasoning: It consists of large number of buyers and sellers.
Assertion: Monopolistic competition involves aggressive advertising by firms.
Reasoning: It consists of large number of buyers and sellers.
Answer & explanation
Correct answer: option 2
There is fierce competition and hence aggressive advertising by the firms because firms deal in products which are close substitute of each other. Large number of sellers does not always imply fierce competition. Take the case of perfect competition. That also consists of large number of sellers but there is advertising or fierce =competition in that form of market.