Hotelling's Law and Product Differentiation
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Questions and Answers

What is Hotelling's law also known as?

  • The law of competitive diversity
  • The principle of minimum differentiation (correct)
  • The principle of maximum differentiation
  • The law of market saturation

    • When was Hotelling's law first observed?

  • 1929 (correct)
  • 1935
  • 1942
  • 1950

    • What is the opposing phenomenon to Hotelling's law?

  • Consumer convergence
  • Price equilibrium
  • Product differentiation (correct)
  • Market homogeneity

    • In the example provided, where is the optimal location for a single shop according to social welfare function?

    <p>Halfway along the length of the street</p> Signup and view all the answers

    What does Hotelling's law suggest about product similarity?

    <p>Producers should make their products as similar as possible</p> Signup and view all the answers

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