A. Which one of the following most strengthens the rivalry among currently compe

Question

A. Which one of the following most strengthens the rivalry among currently competing sellers?

1. buyer demand is growing slowly and buyers have low switching costs

2. products are weakly differentiated and customer loyalty is high

3. products are strongly differentiated and buyers have high switching costs

4. there are so many sellers that the actions of any one seller to attract more customers have little direct impact on rivals

B. Which one of the following factors is not a relevant consideration in judging whether the bargaining power of buyers is relatively strong or weak?

1. whether buyers have high or low switching costs

2. whether the threat of backward integration by buyers is great or small

3. whether buyers purchase products in large quantities or small quantities

4. whether the threat of forward integration by buyers is great or small

Explanation / Answer

A. The answer is given below:

4. there are so many sellers that the actions of any one seller to attract more customers have little direct impact on rivals

As where the seller will have same products which to be sold in the market and attract the customers with different price selling will directly impact on the rivals.

B. The answer is given below:

3. whether buyers purchase products in large quantities or small quantities

On judging the bargaining power of the buyer is not relevant to understand on the strong or weak through the quantities of the product purchased by the buyers.

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