Product differentiation and advertising are used by imperfectly competitive businesses to achieve the two goals of:
A)increased demand and demand elasticity
B)decreased demand elasticity and increased opportunity to engage in successful price fixing
C)the provision of consumer information and the promotion of consumer preferences
D)increased demand and decreased demand elasticity
E)decreased demand and increased demand elasticity

Question

Quizplus · Accepted Answer

Product differentiation and advertising are used by imperfectly competitive businesses to increase demand for their product, as well as to make demand less elastic, meaning that consumers are less likely to switch to alternative products if the price of the product increases. Therefore, the two goals are increased demand and decreased demand elasticity.

Product Differentiation and Advertising Are Used by Imperfectly Competitive Businesses