Any large grocery store carries at least seven different kinds of corn chips--baked, fried, salsa-flavored, white, yellow, blue, and lime-flavored. When is product differentiation real and when is it an illusion? Is there an objective universal answer to

Chapter is attached.  Just need 150-175 word answering the question and referencing the chapter. 

Question:

Any large grocery store carries at least seven different kinds of corn chips--baked, fried, salsa-flavored, white, yellow, blue, and lime-flavored.

1. When is product differentiation real and when is it an illusion?
2. Is there an objective universal answer to a?
3. Are there any individually objective answers to a and b?
4. Does your answer to c tell you anything about the economic implication of the benefit of markets? (Hint: Is the assumption of rational consumers with well-ordered preference functions necessary to the argument)?