When Competitive Intensity Is Low but Switching Costs Are High

question 6

True/False

When competitive intensity is low but switching costs are high, a company is highly vulnerable to consumers who will switch providers.

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Definitions:

Perfectly Elastic

A situation in economics where the quantity demanded or supplied changes infinitely in response to any change in price, typically represented with a horizontal demand or supply curve.

Relatively Inelastic

A term used to describe a situation where the demand or supply for a good or service is less responsive to changes in price.

Total Revenue

The total income that a company receives from its normal business activities, usually from the sale of goods and services to customers.

Inelastic Demand

A situation where the quantity demanded of a good or service changes little when its price changes.