When a particular item is in short supply accompanied by rising prices, a firm might find it beneficial to:
A) Discontinue buying the product and focus more on cheaper products.
B) Align itself with one of the suppliers to ensure a continued supply of the scarce item.
C) Purchase the item from a manufacturer who cuts corners and provides a product below market price.
D) All of these

Question

Quizplus · Accepted Answer

Aligning with a supplier ensures that the firm has a continued supply of the scarce item, which is beneficial in the long term. Discontinuing the purchase of the product might cause the firm to lose out on potential profits, and buying from a manufacturer who cuts corners might lead to a compromise in quality, which could negatively impact the firm's reputation.

When a Particular Item Is in Short Supply Accompanied by Rising