A product-market is one in which
A) demand is inelastic.
B) products that are close substitutes for each other compete for customers by trying to satisfy very similar needs.
C) breakthrough opportunities are no longer possible.
D) one seller has a patent for a superior product and other competitors try to imitate the leader.
E) All of these alternatives are true.

Question

Quizplus · Accepted Answer

A product-market is a group of customers who have similar needs and wants, and who respond similarly to a given set of marketing efforts. In this type of market, products that are close substitutes for each other compete for customers by trying to satisfy very similar needs. This means that the competition is intense, and companies must work hard to differentiate themselves in order to attract and retain customers. Demand elasticity is not a defining characteristic of a product-market, nor is the presence or absence of patents or breakthrough opportunities.

A Product-Market Is One in Which