In a perfectly competitive market, tastes and preferences lead to an increase in the demand for the good. holding everything else constant, this will lead to an increase in price that will result in:

Why is the type of product sold in an industry an important characteristic? a firm that can differentiate its product from that of rivals may be able to charge a higher price for a superior product. a firm that sells intangible goods is usually considered a monopoly. service industries cannot differentiate their products, which makes it easy for new firms to enter the industry. expensive products are usually sold by perfectly competitive firms.