Which of the following statements regarding substitutes is accurate?
A) In the extreme, substitutes can ultimately replace an industry's products or services.
B) Substitutes place a floor on the prices firms in an industry can charge and on the profits firms in an industry can earn.
C) Substitutes rarely impact the profitability that firms in an industry can earn.
D) The importance of substitutes in reducing the profit potential in a wide variety of industries is decreasing.

Question

Quizplus · Accepted Answer

Substitutes can replace an industry's products or services if they offer a better price or performance, thus posing a significant threat to the industry.

Which of the Following Statements Regarding Substitutes Is Accurate