Question

"Competition in quality and service may be just as effective as price competition in giving buyers more for their money." Do you agree? Explain why monopolistically competitive firms frequently prefer non-price competition to price competition.

Answer 1

Answer:

Yes, I agree that Competition in quality and service may be just as effective as price competition in giving buyers more for their money.

Explanation:

Price competition is one of many ways that a product or service can compete in the marketplace with consumers choosing affordability over quality. Consumers make purchases mostly on the basis of which is cheaper.

Competitive pricing is used more by businesses selling similar products, since services can vary from business to business, while the attributes of a product remain similar.

monopolistically competitive firms such as hotels frequently prefer non-price competition because they do not want consumers to choose affordability over quality which is usually more expensive.