A producer of handbags uses a designer label in order to differentiate her produ

Question

A producer of handbags uses a designer label in order to differentiate her product from that of another producer. Which of the following would best explain why the producer would want to differentiate her product?

Successful product differentiation gives a producer a lower chance of becoming a monopolist.

Successful product increases the number of perfect substitutes for the product

Successful product differentiation gives a producer a higher chance of becoming a monopolist.

Successful product differentiation increases elasticity of demand for the product.

Explanation / Answer

option C is correct.

differentiation helps the producer to be as stands alone in the market, where no other competitor follows him. so, he can be enjoys the market as a monoplist in the industry.

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