Effects that arise from a new product or service that decrease sales of the firm's existing products or services are referred to as
A) complementary effects.
B) substitutionary effects.
C) sunk effects.
D) marginal effects.

Question

Quizplus · Accepted Answer

Substitutionary effects occur when a new product or service introduced by a firm leads to a decrease in the sales of its existing products or services, as consumers opt for the new offering instead of the existing ones. This is often seen when a company innovates or updates its product line, potentially cannibalizing sales of its older products.

Effects That Arise from a New Product or Service That