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Product Differentiation Allows a Firm to Charge a Higher Price

Question 3

Multiple Choice

Product differentiation allows a firm to charge a higher price because the residual demand curve facing the firm


A) is more elastic than the residual demand curve without product differentiation.
B) is less elastic than the residual demand curve without product differentiation.
C) is horizontal.
D) shifts to the left.

Correct Answer:

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