Asked by Avelina Milam on Jul 09, 2024
Verified
You are a restaurant owner buying vegetables from a local farmer.You recently found out that another one of the farmer's clients,a competing restaurant has shut down,what would that do to your bargaining power?
A) Increase your bargaining power
B) Decrease your bargaining power
C) Not affect your bargaining power
D) None of the above
Bargaining Power
The relative capacity of one party in a negotiation to influence the terms of an agreement.
Competing Restaurant
An eatery that operates in the same market segment and targets a similar customer base as another restaurant, thus being in direct competition.
Local Farmer
A farmer who cultivates land within a community, often focusing on selling produce directly to local consumers or markets.
- Realize the impact of market conditions and competition on bargaining scenarios.
Verified Answer
KK
Karrlana KinderJul 15, 2024
Final Answer :
A
Explanation :
With the competitor restaurant shutting down, the local farmer may be left with excess produce that they need to sell quickly. This puts the restaurant owner in a position to negotiate a better price or receive better quality produce from the farmer. The farmer may also be more willing to work with the remaining restaurant as they are a reliable source of income. Therefore, the restaurant owner's bargaining power is likely to increase.
Learning Objectives
- Realize the impact of market conditions and competition on bargaining scenarios.