Final answer:
Product Differentiation increases customer value by offering more products, improved quality, or lower prices through unique features and variety which distinguish a firm's offerings from competitors, leading to monopolistic competition.
Step-by-step explanation:
The increased customer value associated with Product Differentiation may take the form of more products, improved quality on existing ones, or lower prices. By differentiating their products, firms attempt to make their products stand out in several ways, including the physical aspects of the product, the location from which it is sold, intangible aspects such as brand prestige or user experience, and perceptions created by marketing.
Differentiation leads to monopolistic competition as products become less interchangeable and businesses can charge a premium for their unique features. This allows companies to potentially capture larger market shares or justify higher prices, thereby increasing customer perceived value through the added variety of styles, flavors, and characteristics that match various consumer preferences.