A Buyer May Be Compelled to Purchase by Specification When

question 9

Multiple Choice

A buyer may be compelled to purchase by specification when:

• A) a high degree of supplier expertise or skill is required and difficult to define.
• B) the internal user's preferences are impossible to overcome.
• C) a supplier holds a needed patent.
• D) an opportunity exists to purchase identical requirements from several sources.
• E) the buyer wants the supplier to decide how to make the most suitable product.

---

Definitions:

Mutual Interdependence

A situation in a market where the actions of one firm significantly impact the profitability of other firms within the same market.

Barriers to Entry

Obstacles that make it difficult for new competitors to enter a market, including high startup costs, strict regulations, or strong incumbents.

Excess Capacity

The situation where a firm or economy can produce more goods or services than currently produced, indicating under-utilization of resources.

Marginal Costs

The additional cost incurred by producing one more unit of a product, which can vary as production scales.