What could be a potential explanation for a firm selling virtually identical products under different brands?
A) Consumers are well informed about the quality of the products.
B) Consumers believe that the products' quality is similar and thus firms are able to price discriminate.
C) Consumers always favor private-label brands.
D) Consumers believe that the products' quality differs and thus firms are able to price discriminate.

Question

Quizplus · Accepted Answer

If consumers believe that the products' quality differs, firms can sell virtually identical products under different brands and appeal to different market segments that are willing to pay different prices for perceived higher quality. This allows the firm to price discriminate and capture a larger share of the market.

What Could Be a Potential Explanation for a Firm Selling