The strength of bargaining power depends on the availability of substitutes and ________ compared to the size of suppliers or customers.
A) the amount of profit made annually
B) the relative size of the firm
C) the production capacity
D) the size of the employee union

Question

Quizplus · Accepted Answer

The relative size of the firm compared to the size of suppliers or customers determines the strength of bargaining power. This is because a larger firm has more bargaining power over smaller suppliers or customers. The availability of substitutes also plays a role, but it is not mentioned in the given choices. The amount of profit made annually, production capacity, and the size of the employee union may impact bargaining power indirectly but are not direct determinants.

The Strength of Bargaining Power Depends on the Availability of Substitutes