Monopoly and Porter's Five Forces of Industry Competition

Monopoly

Prev Question Next Question

Question

The situation of monopoly is most closely affiliated with which of Porter's Five Forces of industry competition? Choose the best answer.

Answers

Explanations

Click on the arrows to vote for the correct answer

A. B. C. D. E.

B

None of these answers is correct. The situation of monopoly is most closely associated with the bargaining power of suppliers. When there exists only one supplier of a product, that supplier possesses a great deal of influence over prices and delivery terms.

Monopolies are thus discouraged and regulated in many instances.

The bargaining power of buyers refers to the influence that customer's have on suppliers. This bargaining power is greatest in the situation of monopsony, which is characterized by only one buyer.

While "rivalry among existing firms" is an appealing choice, it does not represent the best possible answer.

Prev Question Next Question