In competitive markets, companies usually offer a product line instead of just one product to:

• A. appeal to a broader range of consumer preferences
• B. avoid government regulation
• C. reduce production costs through specialization
• D. increase barriers to entry for new competitors

Answer: (A)

Verified step by step guidance

1. Understand the context: In competitive markets, firms often decide on their product strategy based on consumer demand and market competition.
2. Recall the concept of consumer preferences: Consumers have diverse tastes and needs, so offering a variety of products can attract more customers by meeting different preferences.
3. Evaluate each option: Avoiding government regulation is generally unrelated to product line decisions; reducing production costs through specialization usually involves focusing on fewer products, not more; increasing barriers to entry is more about strategic market control than product variety.
4. Identify the main economic rationale: Offering a product line helps firms appeal to a broader range of consumer preferences, which can increase market share and sales.
5. Conclude that the correct reason for offering a product line in competitive markets is to appeal to a broader range of consumer preferences.