Mention an example of each point. Number of buyers vs. suppliers: If the number of buyers is small compared to the number of suppliers, the buyer's power is greater. Dependence of a buyer's purchase on a single supplier: If a buyer can obtain similar products/services from multiple suppliers, the buyer's reliance on a single supplier is reduced. As a result, the buyer's power would be greater. Costs of switching: Switching is costly if there are few alternatives. As a result, the buying power of consumers would be limited. Backward Integration: If a buyer can integrate or merge suppliers, he or she will have more negotiating power with existing suppliers.
Mention an example of each point. Number of buyers vs. suppliers: If the number of buyers is small compared to the number of suppliers, the buyer's power is greater. Dependence of a buyer's purchase on a single supplier: If a buyer can obtain similar products/services from multiple suppliers, the buyer's reliance on a single supplier is reduced. As a result, the buyer's power would be greater. Costs of switching: Switching is costly if there are few alternatives. As a result, the buying power of consumers would be limited. Backward Integration: If a buyer can integrate or merge suppliers, he or she will have more negotiating power with existing suppliers.
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter16: Bargaining
Section: Chapter Questions
Problem 5MC
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Mention an example of each point.
- Number of buyers vs. suppliers: If the number of buyers is small compared to the number of suppliers, the buyer's power is greater.
- Dependence of a buyer's purchase on a single supplier: If a buyer can obtain similar products/services from multiple suppliers, the buyer's reliance on a single supplier is reduced. As a result, the buyer's power would be greater.
- Costs of switching: Switching is costly if there are few alternatives. As a result, the
buying power of consumers would be limited. - Backward Integration: If a buyer can integrate or merge suppliers, he or she will have more negotiating power with existing suppliers.
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