When is the bargaining power of suppliers high?
A)When the cost of switching suppliers is low
B)If prices of substitutes are low
C)If suppliers can realistically threaten forward integration
D)When the rate of investment is low

Question

Quizplus · Accepted Answer

When suppliers have the ability to threaten forward integration (i.e. they have the ability to compete with their customers), their bargaining power can become high as it puts pressure on the customers to satisfy the supplier's demands in order to avoid being cut off from the supply of critical inputs. The other options (A, B, and D) do not necessarily indicate high bargaining power of suppliers.

When Is the Bargaining Power of Suppliers High