To choose: The true option.
Answer to Problem 7MCQ
The correct answer is option b.
Explanation of Solution
Option b is true. With regards to the concept of product differentiation when 2 gas stations selling the same product in different locations are an example of product differentiation.
As we know there are 3 types of product differentiation: Vertical, horizontal, and mixed.
Product differentiation is defined as the characteristic or characteristics that make the product or service of a firm stand out to the target audience. This is the way a firm distinguishes what they are selling from what its competitors are selling, and it increases brand loyalty, growth, and sales.
The most common strategy employed to differentiate a product or service is based on location and Service.
Local businesses can distinguish themselves from their national competitors by highlighting that they upkeep the local community. A local restaurant, for instance, will lease locally and may source its ingredients and food from local farmers and sources.
Chapter 68 Solutions
Krugman's Economics For The Ap® Course
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