The principle of minimum differentiation reflects the
A) tendency for firms to produce at minimum marginal cost in order to compete with one another.
B) tendency for political parties to make themselves identical to appeal to the median voter.
C) concept of minimizing the difference between total benefit and total cost to produce efficiently.
D) attempt to minimize the free-rider problem.

Question

Quizplus · Accepted Answer

The principle of minimum differentiation, also known as Hotelling's law, suggests that political parties or businesses will make themselves similar to appeal to the largest segment of the market or electorate, often targeting the median voter to maximize their appeal.

The Principle of Minimum Differentiation Reflects the