When an organisation using market-based prices cannot differentiate its product due to extensive competition, the product
A) Is considered a commodity
B) Is considered a regulated price
C) Involves more non-value-added activities than value-added activities
D) Cannot be sold at a profit

Question

Quizplus · Accepted Answer

When a product cannot be differentiated due to extensive competition, it becomes equivalent to other similar products in the market, losing its unique selling point. Such a product is considered a commodity. Therefore, option A is the correct choice. Option B is incorrect because regulated prices are controlled by the government or regulatory authorities, not market-based competition. Option C is incorrect because the differentiation of a product has no direct correlation with value-added activities. Option D is also incorrect because even commodities can be sold profitably, and many traders earn significant profits through arbitrage and speculation.

When an Organisation Using Market-Based Prices Cannot Differentiate Its Product