Asked by marta kebede on May 16, 2024
Verified
Product differentiation always leads to some measure of market power.
Product Differentiation
A marketing strategy that businesses use to distinguish their products from those of competitors through design, features, and branding.
Market Power
The ability of a firm or group of firms to control or manipulate prices in the market by controlling supply, demand, or both.
- Elucidate how product differentiation contributes to the generation of market dominance for enterprises within markets characterized by monopolistic competition.
Verified Answer
AM
Amina MohamedMay 20, 2024
Final Answer :
True
Explanation :
Product differentiation allows firms to distinguish their products from those of competitors, which can reduce price competition and give firms some control over their pricing, thereby granting them a degree of market power.
Learning Objectives
- Elucidate how product differentiation contributes to the generation of market dominance for enterprises within markets characterized by monopolistic competition.
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