Final answer:
The correct answer is option a. the products purchased are highly differentiated.
Step-by-step explanation:
The degree of buyer power in a market is affected by several factors, and it will be greater in certain situations. One such situation is when the industry's product is not highly differentiated, meaning that alternatives are readily available and companies cannot rely solely on brand loyalty or unique features to retain customers. Another factor increasing buyer power is when there are low switching costs, as buyers can easily switch from one product to another without incurring significant penalties or inconveniences. Critically, buyer power also peaks when buyers purchase large volumes relative to the sales of the sellers, giving them leverage in negotiations and the potential to demand lower prices or better terms.
Oligopolies, such as the Boeing-Airbus duopoly in the large passenger aircraft market, often feature such dynamics where a few large buyers have significant power. This stems from a combination of economies of scale being small in comparison to market demand and the mutual interdependence characteristic of oligopolistic markets.