Final answer:
The statement is true as product differentiation enables companies to offer unique products or services that can command higher prices, thus providing a competitive advantage.
Step-by-step explanation:
Competitive advantage involves a company making products and services different enough that customers will pay more for them. This statement is true. The practice of making a product or service stand out from competitors is known as product differentiation.
By focusing on differentiated products, a firm can distinguish its offerings through the physical aspects of the product, location, intangible aspects, and perceptions of the product, thereby creating a competitive advantage that can lead to consumers being willing to pay a premium.
Moreover, market competition incentivizes innovation, leading to new technology that can further set a company's products apart from those of its competitors, further solidifying its competitive advantage.