If substitute products or services are readily available, then firms in the industry are likely to suffer lower average profitability.

Question

Quizplus · Accepted Answer

If substitute products or services are available, it increases competition and reduces the pricing power of firms in the industry, leading to lower profitability. Customers can easily switch to the substitute product or service, reducing demand for the original product or service in the industry.

If Substitute Products or Services Are Readily Available, Then Firms