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 size of the employee union
C)the production capacity
D)the relative size of the firm

Question

Quizplus · Accepted Answer

The relative size of the firm compared to the size of suppliers or customers is an important factor in determining bargaining power. If a firm is much larger than its suppliers or customers, it may have greater bargaining power. Similarly, if the firm has many alternative suppliers or customers, it may have greater bargaining power. The other options (profit, employee union, production capacity) are not directly related to bargaining power.

The Strength of Bargaining Power Depends on the Availability of Substitutes