In the Context of Porter's Five Forces Model, Customer's Bargaining

question 82

Multiple Choice

In the context of Porter's five forces model, customer's bargaining power refers to

• A) a customer's ability to create barriers to entry.
• B) a customer's ability to alter his/her value chain.
• C) a customer's ability to integrate IT.
• D) a customer's ability to negotiate better prices.
• E) a customer's ability to create substitutes.

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Definitions:

Supply and Demand

A fundamental economic model that explains how prices and quantities of goods and services are determined in a market based on the interaction between suppliers and consumers.

Market Equilibrium

This is the condition in a market where the quantity supplied equals the quantity demanded at a certain price level, leading to a stable market situation where there is no tendency for change.

Classical Employment Theory

An economic theory suggesting that the market for labor will always clear, meaning unemployment would only be temporary and the labor market would adjust through wage changes.

Loanable Funds Market

A theoretical market in which borrowers and lenders negotiate loans or savings, determining the interest rates through supply and demand for funds.