Question

MicroChips Corp. is a company that supplies microprocessors to 2020 Processors Inc., a computer hardware company. When 2020 Processors Inc. demands lower prices for the microprocessors? MicroChips Corp. makes it clear that it would profit more from launching its own brand of laptops and desktops in the market. Fearing the competition it would then face from MicroChips Corp., 2020 Processors Inc. Decides to buy the microprocessors at the quoted price itself. In this scenario, MicroChips Corp., as a supplier, has exercised its bargaining power by threatening to:_________.

Answer 1

enter the same market as 2020 Processors Inc

Step-by-step explanation:

They have exercised their bargaining power by threatening to enter the same market as 2020 Processors Inc. Doing so would mean trouble for 2020 Processors Inc. since MicroChips Corp already has the microprocessors and can easily overtake 2020 Processors Inc's market share by doing so. Also, they would leave 2020 Processors Inc. without a microprocessor supplier which would technically make their products incomplete and useless, thus making it impossible to compete with MicroChips Corp if they decide to enter the market.