After acquiring closely substitutable product brands,a firm can successfully raise prices on both of the brands without losing much of its total sales because
A)Customers are insensitive to price changes
B)None of these sales would be captured by its other brand
C)Some of these sales lost by one brand would be captured by the other
D)All of the above

Question

​After acquiring closely substitutable product brands,a firm can successfully raise prices on both of the brands without losing much of its total sales because
A)​Customers are insensitive to price changes
B)None of these sales would be captured by its other brand
C)Some of these sales lost by one brand would be captured by the other
D)​All of the above

Quizplus · Accepted Answer

When a firm acquires closely substitutable product brands, it can raise prices on both brands because some of the customers who were buying one brand at the lower price will switch to the other brand at the higher price, which will not result in a significant loss of sales for the firm overall. This is because the firm can capture some of the lost sales from one brand with its other brand. However, customers are not insensitive to price changes, and it cannot be assumed that none of the lost sales will be captured by the firm's other brand. Therefore, options A and B are not correct, while option C is the best choice.

​After Acquiring Closely Substitutable Product Brands,a Firm Can Successfully Raise

After Acquiring Closely Substitutable Product Brands,a Firm Can Successfully Raise