A single source supplier may hold the buyer hostage by unduly raising prices or becoming too complacent,particularly when there are higher switching costs.

Question

Quizplus · Accepted Answer

A single source supplier who holds a monopoly over a product or service can increase their prices without fearing the consequences of losing their customers to competitors. This is because the switching costs for the buyer can be too high. Therefore, the single source supplier can become complacent and take advantage of the buyer's dependence on them.

A Single Source Supplier May Hold the Buyer Hostage by Unduly