A Level Economics AQA Practice Exam

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Prepare for the A Level Economics AQA Exam with our interactive quiz. Test your knowledge with multiple choice questions and detailed explanations. Equip yourself with the tools needed for success!

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What is the main strategy behind non-price competition?

Setting a lower price than competitors
Focusing on product features and customer service
Increasing production to lower average costs
Forming alliances with other firms

The correct answer is: Focusing on product features and customer service

The main strategy behind non-price competition centers around focusing on product features and customer service. This approach emphasizes distinguishing a firm's offerings from those of competitors without engaging in price wars. By enhancing product quality, innovating features, or improving customer service, businesses can build brand loyalty, create a unique market identity, and attract customers who are willing to pay more for perceived value beyond just price. Non-price competition is particularly effective in markets where many firms offer similar products, making price competition less sustainable. It allows firms to carve out a niche based on quality, uniqueness, or additional services that enhance the overall customer experience. Thus, companies that prioritize these aspects often find long-lasting success and customer retention.