In which of the following situations would a company have a lower chance of losing customers when it raises the price of its product?
A)There are low switching costs.
B)Customers have many sellers to choose from.
C)Companies advertise their prices.
D)The product is differentiated across companies.

Question

Quizplus · Accepted Answer

If a product is differentiated across companies, it means that customers are willing to pay more for the unique features or attributes of that product. Therefore, a company may have a lower chance of losing customers when it raises the price if its product is differentiated from its competitors. In contrast, if there are low switching costs, customers can easily switch to a competitor offering a similar product at a lower price. If customers have many sellers to choose from, they can easily switch to another seller with a lower price. If companies advertise their prices, it allows customers to easily compare prices and switch to a lower-priced option.

In Which of the Following Situations Would a Company Have