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 6 months and has been dissatisfied with its service and wanted to cancel the contract.However,he did not do so because he will have to spend a lot for canceling his Z-Gadget contract and signing up for another alternative.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 it sells to
B) Industry participants face switching costs in changing suppliers
C) Suppliers offer differentiated products
D) No substitutes exist for what the supplier group provides

Question

Quizplus · Accepted Answer

Z-Gadget has the characteristic of imposing switching costs on its customers, as John is dissatisfied with their service but is reluctant to switch to another supplier due to the costs associated with canceling his contract and signing up with a new provider.

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