Having product differentiation means that a firm
A) cannot raise its price without suffering substantial loss of sales
B) shifts the demand for the product to the left
C) produces a good that is only a close substitute, at best, for the goods produced by other firms in the industry
D) produces a good that is a perfect substitute for the goods produced by other firms in the industry
E) has no incentive to advertise

Question

Quizplus · Accepted Answer

Product differentiation means that a firm's product is distinct from others in the market, making it only a close substitute for those offered by competitors, rather than a perfect substitute. This allows the firm to potentially command a higher price or market share due to the unique features or perceived value of its product.

Having Product Differentiation Means That a Firm