The concentration of suppliers and the availability of substitute suppliers are significant factors in determining supplier power.

Question

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The level of supplier power is affected by factors such as the concentration of suppliers in the market and the availability of substitute suppliers. The higher the concentration of suppliers, the more power they have over the market price and quality of goods or services they provide. Additionally, the availability of substitute suppliers tends to decrease supplier power because buyers can easily switch to alternative sources of supply. Therefore, both of these factors play a critical role in determining the bargaining power of suppliers in a market.

The Concentration of Suppliers and the Availability of Substitute Suppliers