Because of product differentiation,firms
A) do not have to compete because their products are unique.
B) cannot compete on price.
C) can compete on the basis of quality.
D) are unable to compete by using advertising.
E) must compete on only price.

Question

Quizplus · Accepted Answer

Product differentiation allows firms to compete on the basis of quality, features, design, and other unique characteristics of their products. This means that the firms can differentiate themselves from their competitors and create brand loyalty among consumers. As a result, they do not have to rely solely on price competition and can charge higher prices for their differentiated products. However, they may still face competition from other firms that offer similar or substitute products.

Because of Product Differentiation,firms