How does existence of monopolistic competitive markets affect producers in Uganda?

• It lead to wastage of resource due to duplication of services/activities.
• They carryout competitive advertisement which leads to high operational costs.
• Production of excess capacity, thus underutilization of resources/produce less than the installed capacity.
• The firms/producers earn normal profits in the long run, which limits expansion of operation.
• Existence of stiff competition leads to collapse of small/inefficient firms.
• Firms earn abnormal profits in the short run which can tie ploughed back/used for expansion.
• Existence of competition leads to production of high quality products i.e. improved innovation and invention.
• The firms are price makers because of having monopoly over their brands.

Persuasive advertisement enables firms to expand markets for their products.