An Automobile Manufacturer Is Dependent on a Single Supplier for Tires

question 151

Multiple Choice

An automobile manufacturer is dependent on a single supplier for tires. Based on this information, which statement best describes the situation faced by the manufacturer?

• A) The barriers to market entry are low.
• B) The buyer has greater bargaining power.
• C) The threat of new entrants is high.
• D) The supplier has significant bargaining power.

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Definitions:

Liability

A legal responsibility or obligation, often financial in nature, that an individual or entity is bound to settle.

Implied Bailment

A situation where possession of property is transferred without explicit agreement, with an understanding that the property will be cared for and returned.

Unlocked Locker

A storage unit or compartment that is not secured with a lock, potentially exposing contents to theft or unauthorized access.

Cell Phone

A portable, wireless telephone for making calls over a cellular network, not restricted by physical connection lines.