Question

Businesses that employ differentiation strategy address markets with

Group of answer choices

C)    mass production.

A)    relatively inelastic demand.

B)    relatively elastic demand.

  

D)    no-frills products.

Answer 1

Even there can be niche market for product differentiation and therefore mass production is not the answer

Therefore (C) is the wrong answer

Because product differentiation is performed to reduce the substitute it will not have elastic demand because elastic demand will only be existing if there are substitutes available

Therefore

(B) is wrong

What happens if the product is differentiated is that you actually get to find loyal customers so that even the price increases the quantity decreases proportionately because the differentiated product has loyals which even buy the product despite of the price increase which means demand is inelastic in nature

Therefore (A) relatively inelastic is the answer to this question