You are negotiating with another firm to become one of its suppliers. What types of promises...

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You are negotiating with another firm to become one of its suppliers. What types of promises...

You are negotiating with another firm to become one of its suppliers. What types of promises might you make to the other negotiating team? How could you enhance the credibility of your promises? (Check all that apply.)

A. You could promise to offer a product at a high level of quality. You could show your commitment to offering a high level of quality by investing in a new production technology.

B. You could promise to offer a product at a low price. You could show your commitment to offering a low price by increasing production capacity to lower your marginal cost.

C. You could promise to offer a product at a low price. You could show your commitment to offering a low price by decreasing production capacity to raise your marginal revenue.

D. You could promise to offer a product at a high level of quality. You could show your commitment to offering a high level of quality by increasing your budget for advertisements.

business economics

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Answer 1

Answer #1

Answer - Option A

- Option B

You could promise to offer the product at a high level of quality. You could show your commitment to offering a high quality by investing in a new technology.

You could promise to offer the product at lower price. You could show your commitment by offering at a low price by increasing the production capacity to lower the marginal cost.

The benefits of the new innovative technology and the economies of the scale could be enjoyed. By this the costs can be minimized and the profits could be raised.

Other options raise the cost if we increase the advertisements as there is no need as per the given condition. The product capacity decrease will not lead to the higher MR. Hence option C and D are wrong.

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Answer 2

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