Firms developing products for a narrow segment of a market are less likely to profitably satisfy that group's needs.

Question

Quizplus · Accepted Answer

Firms that develop products for a narrow segment of a market, also known as niche markets, have the advantage of being able to focus and specialize in meeting the specific needs of that group. This can lead to a deeper understanding of the customer's needs and wants, and the ability to create products that better satisfy those needs. As a result, such firms may be able to charge premium prices and achieve high profit margins, despite serving a smaller market.

Firms Developing Products for a Narrow Segment of a Market