Your Boss, David Ferrell, Has Asked You to Analyze the Soft

question 60

Multiple Choice

Your boss, David Ferrell, has asked you to analyze the soft drink industry using Porter's Five Forces Model. Which of the following represents supplier power in the soft drink industry?

• A) Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.
• B) Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in every Walmart store.
• C) Zevia Natural Diet Soda begins selling directly over the Internet.
• D) Vitamin water, fruit juice, and coffee are all beverage options available to consumers.

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Definitions:

Output

The total amount of goods or services produced by a firm, industry, or economy within a given period.

Short-Run Supply

The supply of goods that varies with changes in price in the short term, where at least one factor of production is fixed.

Average Variable Cost

The total variable costs divided by the quantity of output produced, indicating the average cost of production per unit when fixed costs are excluded.

Marginal Cost

The additional cost incurred by producing one more unit of a product or service.