Levin and Co. is a group of oil refineries that has been in the news recently. The company had to stop production for over two weeks because their key supplier refused to sell them crude oil at the old prices. Even after rounds of negotiations, the supplier refused to give in to the demands of Levin and Co. and finally, the company had to acquire the raw material from the same supplier because alternative suppliers, though abundant, could not provide the quantities the company demanded at such short notice. This shows the role of ________ in increasing the power one enjoys.

Question

Quizplus · Accepted Answer

The scenario described highlights the concept of dependence, as Levin and Co. had no other option but to acquire the crude oil from their key supplier, even though the supplier refused to sell it at the old prices. This dependence on a single supplier increased the power of the supplier, giving them leverage to demand higher prices. The options of substitutability and abundance were not viable in this situation, as alternative suppliers were not able to provide the required quantities of crude oil at short notice. The option of exchange is not relevant to the scenario described.