Question: It is difficult or costly for industry members to switch their purchases from one supplier to another. Low switching costs limit supplier bargaining power by
It is difficult or costly for industry members to switch their purchases from one supplier to another. Low switching costs limit supplier bargaining power by enabling industry members to change suppliers if any one supplier attempts to raise prices by more than the costs of switching. Thus, the higher the switching costs of industry members, the stronger the bargaining power of their suppliers.
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