Question

Difference between autonomous and accommodating transaction

Answer 1

Economists distinguish between autonomous and accommodatingitems used in BOP. The basicdifference between the two is that whereas deficit or surplus in BOP occurs due to autonomous items, theaccommodating items are taken to cover deficit (or surplus) inautonomous transactions.

Answer 2

Explanation:

What a firm achieves by differentiating its product from competitors is to create a market in which it can act as a monopoly, enabling them to have price-making power. ... Nevertheless, product differentiation can also be a way to avoid or to create entry barriers and thus become a source of competitive advantag