Substitutes:
There is almost a substitute for any product that is produced in America. For example people can drink Shasta Cola or Pepsi instead of Coke-a-Cola. I have recently experienced an example of this in my life. My mom is a pharmacist and she has recently started buying the generic brand of Allegra called Aller-ease. It is the same medicine only a different name.
Generic brands like this prevents companies from rising prices to unrealistic amounts, along with many other factors. We also talked about this in class and compared clothing brands in class. Also generally if a product has a lot of substitutes it will generally have a elastic demand. This is because if one company rises the prices too high the customers will simply buy another brand. This is also one of the reasons that capital economies work.
I do wonder what products there are, if any, that have no substitutes and if their prices are extremely inflated?
No comments:
Post a Comment