Product differentiation:
A) refers to the attempt by firms to make their products look like those of the other firms in the industry.
B) refers to the attempt by firms to make essentially substitutable products look different in the minds of the consumers.
C) refers to the advantage big firms have in research and development.
D) is a common characteristic of a perfectly competitive market structure.

Question

Quizplus · Accepted Answer

Product differentiation is the process by which firms attempt to distinguish their products from those of their competitors to make them more appealing to consumers. This involves making essentially substitutable products look different in the minds of consumers by highlighting unique features, packaging, marketing, or other strategies. This helps firms increase their market share and charge premium prices for their products. The other options listed do not accurately describe product differentiation.

Product Differentiation