Multiple Choice
Which one of the following is NOT a supply-chain strategy in the context of competitive markets?
76
views
3. The Market Forces of Supply and Demand
Competitive Markets
Multiple Choice
The bargaining power of suppliers is enhanced under which of the following market conditions?
A
When suppliers face perfect competition
B
When there are many suppliers and few buyers
C
When there are many suppliers and many buyers
D
When there are few suppliers and many buyers
Verified step by step guidance1
Understand the concept of 'bargaining power of suppliers': it refers to the ability of suppliers to influence the price and terms of supply in their favor.
Analyze how the number of suppliers and buyers affects this power: fewer suppliers mean less competition among them, which can increase their bargaining power.
Consider the market condition where there are few suppliers and many buyers: buyers have limited options, so suppliers can demand better terms.
Contrast this with conditions where suppliers face perfect competition or there are many suppliers: in these cases, suppliers have less power because buyers can easily switch to other suppliers.
Conclude that the bargaining power of suppliers is enhanced when there are few suppliers and many buyers, as suppliers can leverage their scarcity to negotiate better deals.
Related Videos
Related Practice
