If Customers Perceive the Benefits of a Substitute to Be

question 68

Multiple Choice

If customers perceive the benefits of a substitute to be similar to that of a product,then ________.

• A)the threat from the substitute is weak
• B)the price of the product should be increased to retain market share
• C)the threat from the substitute is strong
• D)there is no threat from the substitute

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Definitions:

Natural Rate

often refers to the natural rate of unemployment, where the economy is at equilibrium, taking into account the frictional and structural factors.

Potential GDP

The maximum possible level of output an economy can achieve when it is most efficiently utilizing its resources.

Unemployment

A situation where individuals who are able and willing to work cannot find jobs, measured as a percentage of the labor force.

Expansionary Fiscal Policy

Government policy aimed at stimulating economic growth by increasing government spending, reducing taxes, or both.