Suppliers are more likely to be powerful relative to the firms to which they sell their goods and services if:
A) differentiation among existing suppliers is high.
B) access to distribution channels is limited.
C) existing suppliers lack economies of scale.
D) the suppliers' industry is highly concentrated.
E) cost advantages independent of size are negligible.

Question

Quizplus · Accepted Answer

When the suppliers' industry is highly concentrated, it means there are fewer suppliers, which increases their power over the firms they supply to, as the firms have fewer alternative sources for their goods and services.

Suppliers Are More Likely to Be Powerful Relative to the Firms