The highest amount a firm can charge for its products is most directly affected by:

Question

Quizplus · Accepted Answer

The cost of substitute products is a major factor that influences the pricing decisions of firms. The higher the cost of substitute products, the more a firm can charge for its own products as customers are less likely to switch to the substitute products due to high costs. Therefore, firms consider the cost of substitute products while setting the highest possible price for their products.

The Highest Amount a Firm Can Charge for Its Products