Monopoly power due to advertising

Advertising leads to economic concentration by serving as a barrier to new product entry by creating brand loyalties. In the early stages of the concentration process the disappearance of the small firms proceeds more or less automatically, while in the later stages competition takes on the character of a war, with each firm being prepared to incur losses in order to keep its territory from being intruded upon by others. If such concentration is not justified by the existence of economies of large-scale production, concentration brought about by advertising results in higher prices to the consumer because of the increase in the degree of monopoly power enjoyed by those in the market.