Asked by Shavon Revell on May 14, 2024
Verified
Suppose you are in charge of product pricing and marketing strategy for a pharmaceutical company. You will have greater ability to independently set prices for your product if:
A) there are no close substitutes for your product.
B) there are lots of other firms selling closely related products in your market.
C) your market is perfectly competitive.
D) none of the above
Perfectly Competitive
A market structure characterized by a large number of small firms, identical products sold by all firms, no barriers to entry, and perfect information among buyers and sellers.
Close Substitutes
Products or services that can easily replace each other in the eyes of consumers due to their similar functions or characteristics.
- Recognize the factors that affect market prices and competition.
Verified Answer
JZ
Jazmin ZamoranoMay 18, 2024
Final Answer :
A
Explanation :
If there are no close substitutes for your product, then customers will have limited options to turn to if they need the specific benefits your product provides. This means that the demand for your product will be less elastic, allowing for greater pricing power.
Learning Objectives
- Recognize the factors that affect market prices and competition.