The highest amount a firm can charge for its products is most directly affected by:. a. expected retaliation from competitors. b. the cost of substitute products. c. variable costs of production. d. customers' high switching costs.

Option B, the cost of substitute products, is the right answer,

Explanation:

Option “B” is the correct answer because if the price of substitute goods is lower then the consumer will go for that commodity. While, if the prices of substitutes are higher then the consumer will not prefer the substitute goods. So the company or firm takes the price of substitutes into consideration before deciding the price of goods. If a firm charges the price that is costlier for the consumer and the consumer is able to find the lower price of substitute goods then the demand for the main commodity will fall and the demand for substitute will increase.

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