Switching costs,the number of buyers,and if the items represent a relatively small portion of the cost of finished products are key consideration regarding the:
A)threat of new entrants to the industry.
B)rivalry among companies competing in the industry.
C)bargaining power of suppliers.
D)bargaining power of buyers.

Question

Quizplus · Accepted Answer

Switching costs and the number of buyers are both factors that affect the bargaining power of buyers. If switching costs are high and there are few buyers, then the buyers have less bargaining power. On the other hand, if switching costs are low and there are many buyers, then the buyers have more bargaining power. The fact that the items represent a relatively small portion of the cost of finished products is not directly related to any of the options given.

Switching Costs,the Number of Buyers,and If the Items Represent a Relatively