Customers tend to exhibit a powerful force on competition in the industry if:
A)There are a large number of customers that buy the product
B)Few similar products exist
C)Purchases customers make from the industry are large relative to the amount spent for items from other industries
D)The sellers' products are highly differentiated
E)The customers are earning high profits

Question

Quizplus · Accepted Answer

When customers make large purchases from the industry relative to their spending on other items, they become a powerful force on competition because their demand becomes crucial for the industry's survival, and they can influence prices and quality. A large number of customers, a few similar products, highly differentiated products, or customers earning high profits are not necessarily indicators of strong customer power.

Customers Tend to Exhibit a Powerful Force on Competition in the Industry