An industry's buyers have high bargaining power when:
A) they purchase in small quantities.
B) switching costs are low.
C) it is economically impossible for them to purchase an input from several companies at once.
D) the supply industry depends upon buyers for a very small percentage of its total orders.
E) the industry is a monopoly.

Question

Quizplus · Accepted Answer

When buyers have low switching costs, they can easily switch to another supplier if the current supplier increases its prices or provides poor quality products or services. This gives buyers more bargaining power to negotiate better prices or terms with their current or potential suppliers.

An Industry's Buyers Have High Bargaining Power When