The principle of minimum differentiation suggests that competitors
A) try to decrease costs by minimising the differences in the types of resources used.
B) try to gain the largest market share by differentiating a popular product.
C) try to distinguish themselves by offering highly different products.
D) tend to make similar goods in order to appeal to the largest number of consumers.

Question

Quizplus · Accepted Answer

The principle of minimum differentiation, also known as Hotelling's law, suggests that businesses tend to offer similar products or services to appeal to the broadest segment of consumers, thereby maximizing their market share by minimizing the differences between their offerings and those of their competitors.

The Principle of Minimum Differentiation Suggests That Competitors