The principle of minimum differentiation suggests that competitors
A) try to distinguish themselves by offering highly different products.
B) try to gain the largest market share by differentiating a popular product.
C) tend to make identical goods in order to appeal to the largest number of consumers.
D) try to decrease costs by minimizing the differences in the types of resources used.

Question

Quizplus · Accepted Answer

The principle of minimum differentiation, also known as Hotelling's law, suggests that competitors tend to make their products similar to appeal to the largest number of consumers, minimizing differentiation to capture the maximum market share.

The Principle of Minimum Differentiation Suggests That Competitors