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
C
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Although current U.S. tariffs are quite low on average, tariffs remain high for some products
Indicate whether the statement is true or false
The sign of the cross-price elasticity tells us whether two commodities are complements or substitutes, but the size of this elasticity measure tells us
a. how the supply side of the market reacts to changes in demand b. whether the government should regulate the two markets c. which technology producers use d. how closely the two goods are related e. whether or not excess profits can be made in either market