Products for which there are fewer substitutes can more easily absorb higher shipping and production costs.

Question

Quizplus · Accepted Answer

When there are fewer substitutes available for a product, consumers are less likely to switch to another product if there is a price increase due to shipping or production costs. This means that the product has a higher level of demand, and the seller can more easily pass on those costs to consumers without losing sales to competitors offering similar products. On the other hand, if there are many substitutes available, consumers have more buying options and are more likely to switch to a cheaper option if the price of a certain product goes up.

Products for Which There Are Fewer Substitutes Can More Easily