substitute goods

What Role Do Substitute Goods Play in Pricing Decisions?

The presence of substitute goods heavily influences pricing decisions. Businesses must consider the prices of substitute products when setting their own prices. If a competitor lowers the price of a substitute, businesses may need to adjust their prices to remain competitive. This interplay can lead to price wars in some industries.

Frequently asked queries:

What are Substitute Goods?
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What Role Do Substitute Goods Play in Pricing Decisions?
Are Substitute Goods Always Direct Competitors?
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