7 of 15 (15 complete) ? ? Score: 9496, 94 yo Text Problem 2.3 Question Help * as

Question

7 of 15 (15 complete) ? ? Score: 9496, 94 yo Text Problem 2.3 Question Help * ass In a market in which there is vertical differentiation, we always see price differences among the products. In markets with horizontal differentiation, sometimes the products differ but prices are very much the same. Why does vertical differentiation naturally bring with it price differences? Without price differences between products with vertical differentiation, everyone will choose the better product. Thus, O A. when the better product costs more to purchase, only some people will be willing to pay i raid the higher price. Others will opt for the lower quality, less expensive alternative. higher price for the better quality product is available, is by having a higher price to signal customers that the quality is O B. when the better product costs more to purchase everyone will be willing to pay the e rec O C. the only way a product can survive in a competitive market in which another, better ou can better than it actually is. O D. when the better product costs more to purchase, no one will be willing to pay the higher you did ntact o price, with everyone opting for the lower quality, less expensive alternative. e Cours Click to select your answer and then click Check Answer All parts showing 2

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ANSWER:

The correct answer is option a because in vertical differentiation , the product can only survive in a competitive market in which better product is available is by lowering the price as without the price difference everyone will choose the better product and only a few of them would buy at a higher price while most of the people will prefer lower price ,less quality goods.

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