The highest amount a firm can charge for its products is most directly affected by:______.
a. expected retaliation from competitors.b. the cost of substitute products.c. variable costs of production.d. customers' high switching costs.

Option “B” is the correct answer because if the price of substitute goods is lower then the consumer will go for that commodity. While, if the prices of substitutes are higher then the consumer will not prefer the substitute goods. So the company or firm takes the price of substitutes into consideration before deciding the price of goods. If a firm charges the price that is costlier for the consumer and the consumer is able to find the lower price of substitute goods then the demand for the main commodity will fall and the demand for substitute will increase.

ayfat23 ayfat23 · Answer 2 · 2021-10-22T13:30:29+02:00

The highest charge of firm on his product can be directly affected B: he cost of substitute products.

A substitute product can be regarded as goods that serves the same purpose that another product serves in the market

in competitive market, there are some factors that affect how much a firm can charge, availability of substitute product is one of them,

If a firm charge so high on its product, the consumer will just switch to similar product that serve same purpose and this will reduce the sales rate.

Therefore, option B is correct

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The highest amount a firm can charge for its products is most directly affected by:______. a. expected retaliation from competitors.b. the cost of substitute products.c. variable costs of production.d. customers' high switching costs.

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The highest amount a firm can charge for its products is most directly affected by:______.
a. expected retaliation from competitors.b. the cost of substitute products.c. variable costs of production.d. customers' high switching costs.