Question

An independent group of suppliers, such as farmers, gather to form a cooperative to sell their products to buyers directly, replacing their former distributor. This is an example of
a) threat of entry.
b) backward integration.
c) forward integration.
d) threat of substitute products.

Answer 1

Answer:

a) Threat of entry.

Explanation:

The farmers are the producer which gather to form the cooperative to sell their product directly to buyers of the products.

It is a threat to the individuals and companies which is working as a intermediary between the farmers and buyer of the product. Buyer will get a more competitive price from farmer cooperative rather than from the intermediaries.