Which of the following is NOT an example of product differentiation in competitive markets?

• A. Advertising unique product features
• B. Selling identical products at the same price
• C. Offering products in different colors
• D. Providing additional customer services

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the concept of product differentiation. Product differentiation refers to the process by which firms make their products distinct from competitors' products through features, quality, design, or services.
2. Step 2: Identify examples of product differentiation. These include advertising unique product features, offering products in different colors, and providing additional customer services, as all these create distinctions between products.
3. Step 3: Analyze the option 'Selling identical products at the same price.' Since the products are identical and priced the same, there is no differentiation involved; this represents a situation closer to perfect competition where products are homogeneous.
4. Step 4: Conclude that 'Selling identical products at the same price' is NOT an example of product differentiation because it lacks any distinguishing characteristics or added value that separate one product from another.
5. Step 5: Summarize that product differentiation involves making products unique in some way, and selling identical products at the same price does not fulfill this criterion.