Answer (B) is correct.
Substitutes are types of goods and services that serve the same purpose. All products that
can replace a good or service should be considered substitutes. For example, bicycles and cars are substitutes for public transportation. Structural considerations determine the effect
substitutes have on one another. However, because substitutes are types (not brands) of
goods and services that have the same purposes, brand identity is not a structural
consideration affecting the threat of substitutes.