An Example of a Supplier That Used Its Bargaining Power

question 154

Multiple Choice

An example of a supplier that used its bargaining power to charge high prices to its customers is

• A) Wal-Mart, which required many of its suppliers to alter their distribution systems to accommodate Wal-Mart's need to control the flow of goods to its stores.
• B) the firms that supply paper napkins to McDonald's restaurants.
• C) the Technicolor Company, the sole producer of cameras and film that movie studios needed to produce color movies in the 1930s and 1940s.
• D) the publishers of the Encyclopedia Britannica.

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Definitions:

Unconscionability

A legal doctrine that describes terms so extremely unjust, or overwhelmingly one-sided in favor of the party who has the superior bargaining power, that they are deemed contrary to good conscience.

Good Faith

Acting with honesty, fairness, and sincerity without any intent to deceive or defraud.

Commercial Practices

Business activities, methods, and policies that are engaged in by entities involved in the buying, selling, and providing of goods and services.

Common Law

A legal system based on custom, court rulings, and past legal precedents rather than statutory laws.