Without price competition, there is no incentive for product differentiation.

Question

Quizplus · Accepted Answer

If there is no price competition, all products will command the same price and consumers will not have a reason to choose one product over another. Therefore, companies will have to differentiate their products in order to gain a competitive advantage and capture market share. Without this incentive, companies may not invest in product innovation or quality improvements.

Without Price Competition, There Is No Incentive for Product Differentiation