John Signed a Two-Year Contract with Z-Gadget to Get a Subsidized

question 33

Multiple Choice

 John signed a two-year contract with Z-Gadget to get a subsidized price on his new iPhone. He had Z-Gadget's service for only six months when he became dissatisfied and wanted to cancel the contract. However, he did not do so because of high cancellation fees as well as new activation fees with another service. Which of the following characteristics of a powerful supplier group does Z-Gadget have with respect to its contract with John?

• A) The supplier industry is more concentrated than the industry to which it sells.
• B) Industry participants face switching costs in changing suppliers.
• C) Suppliers offer differentiated products.
• D) No substitutes exist for what the supplier group provides.

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Definitions:

Anecdotal Evidence

Information based on personal accounts, observations, or stories rather than systematic research.

Miracle Tonics

Alleged remedies or medicines with exaggerated promises of curing health issues, often lacking scientific basis.

Foot-In-The-Door Technique

A persuasion strategy where the persuader starts with a small request and, once complied with, escalates to a larger request.

Highball Technique

A strategy often used in negotiations where an extremely high initial offer is made to reset the negotiation boundaries.