Horizontal differentiation occurs when:
A)one product is always considered superior to the other across a broad spectrum of consumers.
B)some consumers consider a company's product or group of products to be superior to another company's product or group of products, but not all consumers have the same viewpoint.
C)an inventor in the telecom industry comes up with a completely new and innovative product.
D)the demand curve is horizontal in an oligopolistic industry.

Question

Quizplus · Accepted Answer

Horizontal differentiation refers to the differences between products that are not based on quality, but rather on subjective preferences or perceptions. In this case, some consumers may view one company's products as superior, while others may prefer another company's products. This creates differentiation in the market without a clear winner in terms of quality. Option A is not correct, as horizontal differentiation does not necessarily lead to one product being universally considered superior. Option C describes technological innovation, which is not the same as horizontal differentiation. Option D refers to the demand curve, which is not directly related to horizontal differentiation. Horizontal differentiation occurs when some consumers consider a company's product or group of products to be superior to another company's product or group of products, but not all consumers have the same viewpoint. This creates competition based on product differentiation rather than just price.

Horizontal Differentiation Occurs When