Explain price of substitutes products and its indicators

Question

Explain the price of substitutes and indicators of substitute products.

Answer 1

As a ruling, the lower the price of substitutes, the higher their performance and quality, and the lower the user’s switching costs, the more strong the competitive pressures pretense by substitute products.

Good indicators of the competitive strength of the substitute products are the rate at which their profits and sales are increasing, the market inroads they are making, and their plans for the expanding production capacity.