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In economics and marketing, product differentiation (or simply differentiation) is the process of distinguishing a product or service from others to make it more attractive to a particular target market. This involves differentiating it from competitors' products as well as from a firm's other products.
The plastic used in plastic shopping bags also started as a by-product of oil refining. [1] By-products are sometimes called co-products to indicate that although they are secondary, they are desired products. For example, hides and leather may be called co-products of beef production. There is no strict distinction between by-products and co ...
Market definition is an important issue for regulators facing changes in market structure, which needs to be determined. [1] The relationship between buyers and sellers as the main body of the market includes three situations: the relationship between sellers (enterprises and enterprises), the relationship between buyers (enterprises or ...
In microeconomics, joint product pricing is the firm's problem of choosing prices for joint products, which are two or more products produced from the same process or operation, each considered to be of value. Pricing for joint products is more complex than pricing for a single product. To begin with, there are two demand curves.
Products sold by different firms have minimal differences in capabilities, features, and pricing. Thus, buyers cannot distinguish between products based on physical attributes or intangible value. [18] When this condition is not satisfied, the market is characterized by product differentiation. A perfectly competitive market is a theoretical ...
In economics, competition is a scenario where different economic firms [Note 1] are in contention to obtain goods that are limited by varying the elements of the marketing mix: price, product, promotion and place. In classical economic thought, competition causes commercial firms to develop new products, services and technologies, which would ...
However, competitive markets—as understood in formal economic theory—rely on much larger numbers of both buyers and sellers. A market with a single seller and multiple buyers is a monopoly. A market with a single buyer and multiple sellers is a monopsony. These are "the polar opposites of perfect competition". [13]
A minority of economists still support Say's law. Some proponents of real business cycle theory maintain that high unemployment is due to a reduced labor supply rather than reduced demand. In other words, people choose to work less when economic conditions are poor, so that involuntary unemployment does not actually exist. [28]