High buyer power tends to ________ prices and high supplier power ________ the floor beneath which prices cannot be set.

Question

Quizplus · Accepted Answer

When buyers have high power, they have more bargaining power to negotiate lower prices with suppliers. Hence, high buyer power tends to depress prices. On the other hand, high supplier power means suppliers can demand higher prices and set a higher floor for prices, leading to an increase in prices. Therefore, high supplier power tends to raise the floor beneath which prices cannot be set.

High Buyer Power Tends to ________ Prices and High Supplier