In the context of competitive markets, product/market fit occurs when a business:

• A. enters a market with no existing competitors
• B. sets its prices below marginal cost to attract customers
• C. focuses solely on minimizing production costs regardless of consumer demand
• D. offers a product that meets the needs and preferences of its target market, resulting in strong demand

Answer: (D)

Verified step by step guidance

1. Understand the concept of product/market fit: it refers to a situation where a business offers a product that aligns well with the needs and preferences of its target customers, leading to strong demand.
2. Analyze the given options in the context of competitive markets: entering a market with no competitors, setting prices below marginal cost, and focusing only on minimizing production costs.
3. Recognize that entering a market with no competitors does not guarantee product/market fit, as demand depends on how well the product meets customer needs.
4. Understand that setting prices below marginal cost is typically unsustainable and not a characteristic of product/market fit; it may attract customers temporarily but is not a long-term strategy.
5. Conclude that product/market fit is best described by offering a product that satisfies customer preferences, resulting in strong demand, which aligns with the correct answer.