The price of prescription medicine is high, partly because when someone is sick there is no real alternative to buying medicine if they want to get better. Which of Porter's five forces explains how this aspect of the prescription medicine industry helps keep profitability high?

Question

Quizplus · Accepted Answer

The threat of substitutes explains how the lack of alternatives for prescription medicine keeps profitability high. With no substitutes available, buyers have no choice but to purchase the medicine at the high prices set by the industry, giving the companies in the industry strong bargaining power and the ability to maintain high profits.

The Price of Prescription Medicine Is High, Partly Because When