Melloc is one of many suppliers selling milk to retail customers. Since there are many sellers, price is a major determinant of market success. Which of the following statements about Melloc is true?
A)Melloc's customers have to deal with higher switching costs.
B)Melloc will be in a position to dictate terms with its customers.
C)Melloc faces powerful buyers in the retail market.
D)Melloc has a strong control over the market.

Question

Quizplus · Accepted Answer

In a market with many suppliers, buyers have a variety of choices, which increases their power over sellers. This means Melloc faces powerful buyers who can easily switch to another supplier if prices or quality are not competitive, rather than Melloc having control or being able to dictate terms.

Melloc Is One of Many Suppliers Selling Milk to Retail