In a monopolistically competitive market, how does a firm use competitive advertising to maximize its profit given its market power?

In a monopolistically competitive market, firms sell products that are similar but not identical, which gives them some power to set prices. To maximize profit, a firm uses competitive advertising to highlight the unique features of its product and attract more customers. This advertising creates brand loyalty, making consumers more likely to choose their product over competitors, even if it is priced higher. For example, a coffee shop might advertise its special blend and cozy atmosphere to stand out from other coffee shops, encouraging more people to visit. By effectively communicating its unique qualities, the firm can increase sales and, ultimately, its profits.