Buyers with strong bargaining power can limit the industry profitability by Multiple select question.demanding additional features and services.demanding high volume of product.demanding price concessions.demanding better payment terms.
Question
Buyers with strong bargaining power can limit the industry profitability by Multiple select question.demanding additional features and services.demanding high volume of product.demanding price concessions.demanding better payment terms.
Solution
All of the options listed can potentially limit the profitability of an industry if buyers have strong bargaining power. Here's how:
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Demanding additional features and services: If buyers demand more features or services without being willing to pay more, the cost of production or provision of services increases for the industry. This can reduce profitability if the industry cannot pass these costs onto the consumer.
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Demanding high volume of product: If buyers demand a high volume of product, it can put pressure on the industry to produce more. This can lead to increased costs, especially if the industry needs to invest in more resources to meet the demand. If these costs cannot be passed onto the buyer, profitability can decrease.
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Demanding price concessions: If buyers have strong bargaining power, they can demand lower prices. This directly reduces the revenue of the industry, and thus its profitability, especially if costs remain the same or increase.
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Demanding better payment terms: If buyers demand better payment terms, such as longer payment periods, it can affect the cash flow of the industry. This can limit profitability, especially if the industry has to borrow to cover its costs in the meantime.
So, all of the options can limit the profitability of an industry if buyers have strong bargaining power
Similar Questions
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Buyer bargaining power is strong whenMultiple choice question.demand is weak.buyers make purchases in small quantities.buyers place high importance on brand reputation.the cost of switching to a competing brand is high.
Even when a breach of contract on the sellers part occurs,Multiple select question.the buyer typically still wants the goods.the buyer will have many alternatives.the buyer may not have alternatives.the buyer will not want the goods.
Which of the following is NOT a factor that causes buyer bargaining power to be stronger?Question 3AnswerA.Some buyers are a threat to integrate backward into the business of sellers and become an important competitor.B.Buyers are small and numerous relative to sellers.C.Buyers have considerable discretion over whether and when they purchase the product.D.Buyers purchase the item frequently and are well-informed about sellers' products, prices, and costs.E.The costs incurred by buyers in switching to competing brands or to substitute products are relatively low.
Suppose a buyer refuses to go ahead with contract during the process of manufacturing of goods. In that case, the seller should pick a remedy that:Multiple choice question.maximizes the seller's loss.the buyer refuses.minimizes the seller's loss.the buyer manipulates.
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