Question

The term quality competition refers to __________.

• A. product variation
• B. price variation
• C. price competition
• D. all the above

Answer 1

Answer: (A)

product variation

Monopolistic competition is a situation where there are large number of sellers who sell heteregeneous products. There is also no barriers to entry. Sellers have free authority to discriminate price. To sell their products they use marketing strategies as well as try to sell unique products. The firms under monopolistic competition competes through product variation and advertisements. Product variation means to vary in terms of quality, quantity, potency and purity of the product. Hence, the term quality competition is product variation.