Product differentiation in monopolistically competitive markets:
A)can reflect real or perceived differences in the product.
B)cannot be done on the basis of a simple difference in packaging.
C)is not easily identifiable.
D)reduces each firm's ability to control prices.

Question

Quizplus · Accepted Answer

Product differentiation in monopolistically competitive markets can reflect real or perceived differences in the product, such as quality, design, or features, which creates a perceived uniqueness in the eyes of the consumers. This allows firms to charge a higher price for their product compared to their competitors.

Product Differentiation in Monopolistically Competitive Markets