GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -In other words, the product of each and every firm in a perfectly competitive market is a perfect substitute to others’ products in terms of quantity, quality, colour, size, features, etc. Therefore, product differentiation is not possible under perfect competition.
Detailed explanation-2: -Expert Answer The statement mentioned is false. Product differentiation is introducing new products to reach a wider range of customers. It makes the product unique for the targeted audience.
Detailed explanation-3: -In the perfect or pure competition market, there are a large number of firms each producing the same product (as called a standardized or homogeneous product).
Detailed explanation-4: -A company’s product is a differentiated product if it is uniquely different than those of competitors. If the product is different, the producer can make the case that it is better. If it is a better product, the company can charge a higher price for it.