Which of the Following Is True of Product Differentiation

question 88

Multiple Choice

Which of the following is true of product differentiation?

• A)Product differentiation ensures that firms face a horizontal market demand curve.
• B)Product differentiation allows monopolistically competitive firms to make positive economic profits in the long run.
• C)Prices of differentiated products have to vary substantially for product differentiation to be successful.
• D)Successful product differentiation can be based on differences that are perceived by consumers.

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Definitions:

Attitudes

Psychological tendencies expressed by evaluating a particular entity with some degree of favor or disfavor.

Negative Correlation

A relationship between two variables where one variable increases as the other decreases.

High Values

Refers to principles or standards considered to be of utmost importance by an individual or society.

Low Values

Refers to minimal or significantly below average quantities or assessments in various contexts, such as moral standards, numerical data, or personal principles.