Advertising primarily affects the demand curve. It does not directly impact the supply curve. However, a successful advertising campaign can lead to a shift in the demand curve.

Impact on Demand Curve: Effective advertising increases consumer awareness, creates a desire for the product, and can alter consumer preferences. This leads to an increase in the demand for the product. The demand curve shifts to the right.

Impact on Equilibrium Price and Quantity: A rightward shift in the demand curve results in a higher equilibrium price and a higher equilibrium quantity. Sellers, seeing increased demand, are incentivized to produce more. This increased production, combined with the higher price, leads to a greater quantity being traded in the market.

Potential for Supply Response: If the advertising campaign is very successful and sustained, it might also encourage new firms to enter the market, shifting the supply curve to the right in the long run. This would further lower the equilibrium price and increase the equilibrium quantity.

In an oligopoly, the actions of one seller are highly significant because there are only a few firms competing. Each firm must consider how its competitors will react to its decisions.

Price Change by One Seller: If one seller lowers its price, it will likely attract customers away from its competitors. This will put pressure on the other sellers to respond. They might lower their own prices to remain competitive, leading to a price war. If all sellers lower their prices, the overall market price will fall, and the quantity traded will increase.

Price Increase by One Seller: If one seller raises its price, it risks losing customers to its competitors. If the other sellers do not raise their prices, the seller with the higher price will likely see a decrease in demand and a reduction in quantity sold. However, if the other sellers raise their prices as well, the price increase might be sustained, and the seller with the higher price could maintain its profitability.

Price Wars: A price war occurs when sellers repeatedly lower their prices in response to each other's price cuts. This can be damaging to all firms in the market, as it reduces profitability and can lead to losses. Price wars are often a result of firms trying to gain market share or to prevent competitors from gaining market share.

Strategic Considerations: Oligopolistic firms often engage in strategic behavior, anticipating their competitors' actions. They might choose to maintain prices even if a competitor lowers its price, hoping that the competitor will not sustain the price cut. They might also collude (illegally) to fix prices and restrict output, but this is generally illegal and carries significant penalties.

The price elasticity of demand (PED) measures the responsiveness of quantity demanded to a change in price. Different market structures have varying characteristics that significantly impact PED.

Perfect Competition: This market structure has many small firms, homogeneous products, and free entry and exit. PED is typically elastic. This is because consumers have many alternatives, so if the price rises, they can easily switch to a competitor. For example, consider the market for agricultural products like wheat. If the price of wheat increases significantly, consumers can switch to other grains or substitute goods. The ease of entry and exit also contributes to PED; if profits are high, new firms will enter, increasing supply and driving prices down.

Monopoly: A monopoly has a single seller and significant barriers to entry. PED is generally inelastic. Consumers have no close substitutes, so they are less responsive to price changes. For example, a local utility company providing electricity often operates as a monopoly. Even if the price increases, people still need electricity, so demand won't fall significantly. The barriers to entry prevent other companies from competing and offering alternative products.

Oligopoly: This market structure has a few large firms that dominate the market. PED can be either elastic or inelastic, depending on the degree of product differentiation and the nature of competition between firms. If products are highly differentiated (e.g., cars), PED might be relatively elastic as consumers can switch between brands. However, if products are similar (e.g., steel), PED might be inelastic. An example is the market for automobiles. Consumers have many brands to choose from, so demand is relatively elastic. However, if the remaining few car manufacturers collude, demand becomes more inelastic.

Monopolistic Competition: This market structure has many firms selling differentiated products. PED is relatively elastic. The product differentiation allows firms some control over price, but consumers have many alternatives. For example, the restaurant industry is a good example. Consumers can choose from a wide variety of restaurants, each offering a slightly different menu and atmosphere. If one restaurant raises its prices significantly, consumers can easily switch to another.

In summary, the characteristics of a market structure – number of sellers, product differentiation, barriers to entry – directly influence the ability of consumers to switch to alternatives when prices change, thereby affecting the price elasticity of demand.