Final answer:
First-tier suppliers are those who directly provide components, systems, or finished goods and services to the primary firm, forming a key part of the supply chain.
Step-by-step explanation:
First-tier suppliers are defined as suppliers who provide components, systems, or finished goods and services directly to the primary firm. They are an integral part of the supply chain, as they play a crucial role in delivering the necessary materials or products that a company needs to create its final products or services.
The decision that suppliers make regarding how much to offer for sale at various prices is influenced by the cost of producing those goods and services. Likewise, consumers must decide how much they are willing to pay for these goods and services, balancing their needs and financial constraints.
Increases in demand can lead to higher prices, and this in turn motivates more suppliers to enter the market. This economic dynamic ensures that there is a balance between supply and demand, making sure that the quantity of goods and services supplied matches the quantity demanded by consumers.