The principle of minimum differentiation reflects the
A) attempt to minimise the free- rider problem.
B) tendency for firms to produce at minimum marginal cost in order to compete with one another.
C) concept of minimising the difference between total benefit and total cost to produce efficiently.
D) tendency for political parties to make themselves identical to appeal to the median voter.

Question

Quizplus · Accepted Answer

The principle of minimum differentiation, particularly in the context of the Hotelling’s model, often refers to the tendency of competitors, such as political parties, to make their policies or products more similar to appeal to the broadest portion of the electorate or market, which is typically centered around the median preferences.

The Principle of Minimum Differentiation Reflects the