An industry's buyers have high bargaining power when
A)buyers purchase in large quantities.
B)switching costs are low.
C)it is economically feasible for buyers to purchase inputs from several companies at once.
D)buyers can threaten to enter an industry and produce the product themselves.
E)all of these choices

Question

Quizplus · Accepted Answer

All of these factors contribute to high bargaining power for buyers. When buyers purchase in large quantities, they have more leverage to negotiate lower prices or better terms. When switching costs are low, buyers can easily switch to a competitor if they are not satisfied with their current supplier. If it is economically feasible for buyers to purchase inputs from several companies at once, this gives them more options and bargaining power. Finally, if buyers can threaten to enter an industry and produce the product themselves, this can further increase their bargaining power.

An Industry's Buyers Have High Bargaining Power When