The goal of advertising a product is to differentiate it from competitors' products so that price is less of a factor when a consumer makes a purchase is considered nonprice competition.
How to measure industry concentration: the concentration of four companies, the ratio of the output (sales) of the four largest companies in the industry to the total sales of the industry. Herfindahl Index is the sum of the squares of the market share of all companies in the industry.
As differentiation progresses, there may be sufficient demand to offset additional costs.
Each company's share of the total market is relatively small. It is in a very convenient location for our customers to advertise a product.
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