Buying Firms Prefer a Transactional Relationship When There Are Few

question 40

True/False

Buying firms prefer a transactional relationship when there are few alternatives and the complexity of purchase is high.

---

Definitions:

Actual Activity

The real measure of activity achieved in a given period, such as units produced, machine hours, or labor hours.

Flexible Budget

A budget that adapts or changes according to fluctuations in activity levels or volume.

Fixed Costs

Costs that do not vary with the level of production or sales over a certain range, such as rent, salaries, and insurance.

Activity Level

A measure of the volume of production or operations, which can impact costs and profitability within a business.