Question

Firms with highly differentiated products may have loyal customers, or customers who are unable to purchase similar products or services from other firms and are therefore more likely to accept increased prices due to a firm passing on increased costs by a powerful supplier.

Answer 1

True

Step-by-step explanation:

Product differentiation allows to distinguish a good from the ones that the competition offers and makes it more attractive to customers by offering a unique value and helps to get an advantage over the competition reducing it. Because of this, companies that have highly differentiated products may have customers that are more likely to accept increased prices because it is not easy to replace it and the differentiation creates brand loyalty. According to this, the answer is that the statement is true.