Consider a market in which consumer indifference curves are relatively steep. Firms in the industry are pursuing two positioning strategies: some firms are producing a

“basic” product that provides satisfactory performance; others are producing an enhanced product that provides performance superior to that of the basic product.

Consumer surplus parity currently exists in the industry. Are the prices of the basic and the enhanced product likely to be significantly different or about the same? Why?

How would the answer change if consumer indifference curves were relatively flat?