What type of competition involves businesses creating a unique selling proposition rather than competing on price?

The correct choice highlights the concept of non-price competition, which refers to strategies that companies use to attract customers without focusing on their pricing. Businesses engaging in non-price competition develop unique selling propositions (USPs) that distinguish their products or services from those of their competitors. This can involve various attributes such as quality, customer service, brand image, or product features.

For example, a company might advertise the superior quality of its handmade products or highlight excellent customer support, encouraging consumers to choose their offerings over lower-priced alternatives. This approach allows businesses to foster brand loyalty and can lead to higher profit margins since they are not solely reliant on competitive pricing strategies.

Other types of competition, such as price competition, focus primarily on lowering prices to attract customers, which can lead to price wars and reduced profits. Cost competition involves businesses trying to operate at lower costs to offer cheaper alternatives. Absolute competition isn’t a widely recognized term in competitive business strategies, thus making non-price competition the most relevant answer in this context.