Final answer:
Tje correct answer is option e. Firms looking to reduce dependency on buyers or suppliers can use strategies like long-term contracting, alliances, joint ventures, and vertical integration. However, using a monopolist buyer/supplier is not a strategy for reducing dependence and may actually increase it. The correct answer is option E.
Step-by-step explanation:
When firms suffer from dependence relationships with their buyers or suppliers, they can take several actions to reduce this dependence. Options such as long-term contracting, forming alliances, establishing joint ventures, and pursuing vertical integration are all proactive strategies that firms can employ.
Long-term contracts can lock in supply or demand at predetermined prices, reducing uncertainty. Alliances and joint ventures allow firms to collaborate, combining resources and strengths to achieve mutual gains and reduce dependence on external entities. Vertical integration involves a firm taking control of its supply chain by acquiring or developing its own suppliers or buyers, thereby reducing the need for external sources.
In the context of this question, option E, 'using a monopolist buyer/supplier' is not a way to reduce dependence. In fact, it might increase dependency, as there would be fewer alternative sources or customers to turn to. This contrasts with the other options, which all represent strategies to create more independence and control over the business environment.
The correct answer to the question is: e. using a monopolist buyer/supplier.