In which of the following situations would the supplier have the greatest power to hurt a business that is its customer?
A)The supplier rents building space to a bakery in a real estate market with a vacancy rate of less than .5%.
B)The supplier is one of 100 companies selling the input needed by the business.
C)The business could use an alternative input mix that uses significantly less of the supplier's product.
D)The cost for the business to switch to a different supplier is low.

Question

Quizplus · Accepted Answer

In a real estate market with a vacancy rate of less than 0.5%, finding alternative building space would be difficult and expensive for the bakery. Therefore, the supplier would have significant power to hurt the bakery by raising rent prices or not renewing the lease.

In Which of the Following Situations Would the Supplier Have