The basis of product differentiation is to convince your customers that your product _____ so that customers will _____ for your firm's product.
A)is different from the output of other sellers; have a more elastic demand
B)will more completely satisfy their wants; pay a higher price
C)is the best version; be more price sensitive
D)is as good as any other version; pay an equal price

Question

Quizplus · Accepted Answer

Product differentiation is about convincing customers that your product will better meet their needs and wants than other options, so they will be willing to pay a higher price for it. Option B best reflects this concept. Option A suggests a more elastic demand, which may not necessarily be the case with product differentiation. Option C implies that your product is objectively the best, which may not be true, and option D suggests that customers would be willing to pay the same price for any product, which is not the goal of product differentiation.

The Basis of Product Differentiation Is to Convince Your Customers