The Strength of Bargaining Power Depends on the Availability of Substitutes

question 41

Multiple Choice

The strength of bargaining power depends on the availability of substitutes and ________ compared to the size of suppliers or customers.

• A) the amount of profit made annually
• B) the relative size of the firm
• C) the production capacity
• D) the size of the employee union

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Definitions:

Initial Endowment

The initial quantity of goods, services, assets, or resources that an individual, institution, or economy possesses.

Pareto Optimal

A situation where resources are distributed in such a manner that it's not feasible to rearrange them to benefit someone without adversely affecting at least another individual or preference standard.

Initial Endowment

The initial quantity of goods, resources, or wealth that an individual or entity possesses at the start of a period or game.

Pareto Optimal

A distribution of resources from which it is impossible to reallocate in order to make any individual better off without making at least one individual worse off.