D. advertising informs brand knowledge.


In an oligopoly, a small number of companies dominate the market for a specific commodity, choosing not to compete among each other in price or quality. The barrier of entry is very high, and therefore, new products surface infrequently. As such, the participants try to get ahead by spending more on advertising.

Highest UK Advertising Spending in 2014.
Companies that Spend the Most on Advertising in the UK (Source: https://s3-eu-west-1.amazonaws.com)

The purpose of this strategy is to familiarize consumers with the various brands employed by each of the companies. Then, when they are looking for a new item of the same variety, they may recognize the brand and choose it from the multitude of virtually identical products that characterize oligopolies.