Product differentiation causes the seller of a good to face what type of demand curve?
A)downward sloping
B)vertical
C)horizontal
D)Any of the above could be correct since product differentiation does not affect the shape of the demand curve.

Question

Quizplus · Accepted Answer

Product differentiation causes the seller to have some degree of market power, which means that they can charge a higher price than their competitors. This leads to a downward sloping demand curve, as consumers will be willing to purchase less of the good at higher prices.

Product Differentiation Causes the Seller of a Good to Face