Whether Buyer Bargaining Power Poses a Strong or Weak Source

question 17

Multiple Choice

Whether buyer bargaining power poses a strong or weak source of competitive pressure on industry members depends in part on

• A)the degree to which buyers have any bargaining preferences and the extent to which buyers are price sensitive.
• B)how many buyers are engaged in collaborative partnerships with sellers.
• C)whether entry barriers are high or low and the size of the pool of likely entry candidates.
• D)whether the overall quality of the items being furnished by industry members is rising or falling.
• E)whether demand-supply conditions represent a buyer's market or a seller's market.

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Definitions:

Cost Structure

The relative proportion of fixed, variable, and mixed costs in an organization.

Unit Product Cost

The total cost to produce one unit of product, including direct materials, direct labor, and manufacturing overhead.

Common Fixed Expenses

Expenses that remain constant in total amount and are not affected by changes in business activity level, shared across multiple business segments or products.

Business Segments

Parts of a company that can be separately identified by products provided or by geographic markets, allowing for analysis of the different areas of a business.