aSAP)The following question references the following equation:

Profit = (Price - Cost) x Quantity

You are the manager of an incumbent firm within an industry. Your price, cost and quantity of units produced is affected by one or more of the five forces discussed in the Porter model. Thus, the relationships between the forces influencing your industry are captured in the simple equation for profits. Indicate which of the following answer choice is correct (for incumbents in the industry) for the following force. Write short sentence or two explaining why this is so. This question is worth 3 points.

Stronger buyer power:

A. Would cause costs to go down

B. Would cause costs to go up

C. Would cause prices to go down