Question

Glen found three brands of earbuds that have the specifications he wants. The three pairs of earbuds looked a bit different from each other, but Glen knew they would perform similarly. Still, each company offered its earbuds at a different price. What economic concept does this situation represent?

1.collusion
2.product differentiation
3.price-fixing
4.natural monopoly

Answer 1

2. Product Differentitation

Answer 2

(2) Product differentiation is the right answer.

Step-by-step explanation:

The marketing process to communicate and identify the unique benefits and the qualities of a product in comparison to its competitors is called product differentiation. If product differentiation is successful it creates a competitive advantage for the seller. It raises customer interest and brand loyalty. Its main aim is to make your product stand out. by identifying the qualities of the products its sets the product apart from similar products. Product packaging, promotion, and naming are used for product differentiation, sellers add new features or simply change the packing. It works because it alters the customer's evaluation of the product's benefits.