Monopolistically competitive firms can use product differentiation to do which of the following?

Question

Quizplus · Accepted Answer

Product differentiation in monopolistic competition allows firms to create unique products or services, which can include features that act as commitment devices for consumers. These commitment devices can help consumers stick to their preferences or consumption plans, enhancing customer loyalty and potentially allowing firms to maintain a certain level of demand for their differentiated product. The other options (A, B, D) are not accurate descriptions of the outcomes of product differentiation in monopolistically competitive markets.

Monopolistically Competitive Firms Can Use Product Differentiation to Do Which