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If artisans must buy raw material and sell products through the same trader, what dependency risk arises?

Answer and explanation

Correct answer: Bargaining power may fall due to dual control

Direct answer: Option A. If one trader supplies raw material and also buys the finished goods, that trader may influence both the artisan’s costs and selling price. The dependency chain is: the artisan must obtain material from the trader; the artisan may then have limited choice about where to sell; the trader can therefore gain stronger negotiating power. This may reduce the artisan’s ability to demand a fair input price or product price. Option A is correct because dual control can weaken bargaining power, although the exact result can vary. Option B is wrong because dependence on one trader is not an independent market. Option C is wrong because product value does not always rise; prices may be controlled or unfair. Option D is wrong because buying and selling through one trader cannot automatically certify skill. Remember: one buyer plus one supplier can create a dependency chain.

Related tags

HandicraftsTrader-DependencyBargaining-PowerValue-Chain

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