Asked by Travis Entwisle on Apr 29, 2024
Verified
Product differentiation that makes the product better for some consumers and worse for others is
A) always welfare decreasing.
B) vertical differentiation.
C) horizontal differentiation.
D) never undertaken by firms.
Horizontal Differentiation
Products differ in ways that make them better for some people and worse for others.
Vertical Differentiation
A product difference that, from everyone’s perspective, makes a product better than rival products.
- Comprehend the importance of product differentiation and the forms it can take (horizontal and vertical).
Verified Answer
RC
Rocky ChannelMay 02, 2024
Final Answer :
C
Explanation :
Horizontal differentiation refers to differences in products that make them better for some consumers and worse for others based on personal preferences, rather than quality or price. This contrasts with vertical differentiation, where product differences are objectively better or worse, such as in quality or performance.
Learning Objectives
- Comprehend the importance of product differentiation and the forms it can take (horizontal and vertical).
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