The statements regard product differentiation in monopolistic competition. Identify the statements as being either true or false. Each term may be used more than once. 1. Product differentiation can include small physical changes to the product, physical location of where the product is sold, and perceptions about the product brought about by advertising. 2. Monopolistic competition through the use of product differentiation promotes productive and allocative efficiency automatically since the market forces are at work. 3. One of the problems of product differentiation is that the price of differentiated products is higher than they would otherwise be.