Question

Which of the following conditions determines whether buyer bargaining power in an industry is weak?

a) There is a surge in buyer demand that creates a "seller's market."

b) Buyer demand is weak or declining.

c) Buyer switching costs to competing brands is low.

d) Buyers who make large-volume purchases are important to sellers.

Answer 1

Buyer bargaining power is weak when there is a surge in buyer demand that creates a "seller's market," giving sellers more leverage due to high demand and limited supply.

Step-by-step explanation:

The question concerns the concept of the bargaining power of buyers within an industry, which can influence market dynamics, prices, and competitive strategies. Buyer bargaining power is determined by several factors, including demand conditions, switching costs, and market structure. Conditions such as a surge in buyer demand creating a seller's market, an established reputation for price slashing, and brand recognition, all impact bargaining power.

From the options provided, a) There is a surge in buyer demand that creates a "seller's market." which would indicate that buyer bargaining power is weak. In a "seller's market," sellers have the upper hand due to high demand relative to supply, and thus buyers have less leverage to negotiate prices down.