Answer to Question #209020 in Macroeconomics for mimi

Question

what is the effect on the market when suppliers under invest in their businesses

Answer 1

Suppliers who underinvest in their companies jeopardize supply volumes. They are likely to interfere with the normal business operation therefore destroying the relationship that exists between the customers and the firms. They will increase the lead time resulting to delays of the production process. The current business environment requires suppliers investment to support innovation to overcome the competition from the rivals.