When Considering the Impact of Product Differentiation on the Threat

question 48

Multiple Choice

When considering the impact of product differentiation on the threat of rivalry, product differentiation

• A) reduces the threat of rivalry to zero.
• B) increases the threat of rivalry by forcing each firm in an industry to compete directly with one another instead of allowing them to carve out their own unique product niche.
• C) has no impact on the threat of rivalry.
• D) reduces the threat of rivalry because each firm in an industry attempts to carve out its own unique product niche.

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Definitions:

Competing

Competing involves entities, such as businesses or individuals, striving against each other to achieve a goal, such as market dominance or higher sales.

Payoff Matrix

A table that shows the potential outcomes and payoffs resulting from different decisions or strategies in a strategic game.

Dominant Strategy

Within game theory, a strategy considered optimal for a participant in a game, irrespective of the strategies opted by competitors.

Low Price

Refers to the condition where the cost of a good or service is lower than usual, making it more affordable to consumers.