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Why is Walmart able to dictate vendors' prices?

a) Due to its ethical business practices
b) Because of its small market share
c) Because of its large market share and purchasing power
d) Due to government regulations and interventions

User Tomferon
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1 Answer

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Final answer:

Walmart can dictate vendors' prices due to its large market share and purchasing power, characteristic of an oligopoly.

Step-by-step explanation:

Walmart is able to dictate vendors' prices primarily c) Because of its large market share and purchasing power. Walmart's sizable market share allows it to influence the market on the basis of its own terms, which is a characteristic of an oligopoly. In an oligopoly, a small number of large firms hold the majority of market sales, leading to a situation where each firm's decisions regarding output, price, and other factors are interdependent on the actions of the others. This immense purchasing power gives Walmart the ability to negotiate lower prices from its vendors to maintain its low price strategy for consumers, continuing to enhance its market dominance over competitors.

User Johnathan Elmore
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