One of the reasons why firms with a narrow product line elect to serve multiple segments is to create a portfolio of customers that hedge against low demand risks.

Question

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By serving multiple segments, a firm can diversify its customer base and reduce the impact of low demand in a particular market segment. This can provide a cushion against economic downturns, changes in consumer preferences, or other factors that might reduce sales in a particular market segment.

One of the Reasons Why Firms with a Narrow Product