CIPS L4M2 Exam - Topic 3 Question 36 Discussion

Actual exam question for CIPS's L4M2 exam

Question #: 36
Topic #: 3

[All L4M2 Questions]

Which of the following events would increase the number of suppliers in a particular market?

AIntroduction of minimum wage regulations

BHigh and increasing levels of investment required to enter the market

CRequirement for all companies to have 10,000 or more employees

DDe-regulation of a previously government-run industry

Show Suggested Answer

Suggested Answer: C

The buying organisation is keen to encourage innovation so they should use the outcome or output based specification. In an outcome-based specification, umbrella statements like 'good quality', 'ambient temperature', 'convenient way' are often used. This may confuse the suppliers, and it's hard to check the solution that supplier offers. On the other hand, ouput-based specifications often include measurable requirements. For example, a specification for air conditioning system states that the system should maintain the room temperature at 19-24 degrees Celsius. Therefore, output specification is more appropriate in this case.

LO 3, AC 3.1

by Janine at Jun 02, 2024, 01:12 PM

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Linwood

3 months ago

I thought high investment would limit new entrants, not increase them!

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Vanda

3 months ago

Minimum wage might actually scare some suppliers away.

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Ilene

3 months ago

Wait, are we sure de-regulation always leads to more suppliers?

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Willow

4 months ago

Totally agree, D is the right choice!

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Lynelle

4 months ago

De-regulation usually opens up markets to new suppliers.

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Serina

4 months ago

I feel like the requirement for large companies would definitely limit suppliers, so I’m leaning towards de-regulation as the right answer.

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Rosamond

4 months ago

The minimum wage regulations could complicate things for some suppliers, but I don't see how that would increase their numbers.

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My

4 months ago

I remember a practice question about market entry barriers, and I think high investment levels would actually deter new suppliers, not encourage them.

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Kanisha

5 months ago

I think de-regulation might increase suppliers since it could lower barriers to entry, but I'm not entirely sure.

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Rosamond

5 months ago

I'm a little confused by this question. I'll need to review my notes on market structure and competition to determine the right answer.

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Brett

5 months ago

Okay, I've got it! The key is to identify which of these events would make it easier for new suppliers to enter the market. I'm pretty confident I can figure this out.

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Stevie

5 months ago

Hmm, I'm a bit unsure about this one. I need to carefully consider how each of these events would impact the barriers to entry and the incentives for new suppliers.

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Francisca

5 months ago

This seems like a straightforward economics question. I'll think through the factors that affect the number of suppliers in a market.

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Elise

5 months ago

Okay, I think I know the difference. I'll explain my reasoning in the exam response.

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France

5 months ago

Hmm, I'm a bit unsure about this one. Assessing security during deployment, ensuring compliance during testing, or developing an approved equipment list - they all seem like reasonable options. I'll have to weigh the pros and cons of each.

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Shaun

10 months ago

Haha, Noah, you had me worried there for a second! At least you're keeping us on our toes.

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Noah

10 months ago

Hold up, does the question say 'increase the number of suppliers'? I was thinking it said 'decrease the number of suppliers'. Oops, my bad!

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Clarinda

9 months ago

D) De-regulation of a previously government-run industry

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Ashton

9 months ago

B) High and increasing levels of investment required to enter the market

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Kyoko

9 months ago

A) Introduction of minimum wage regulations

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Melina

10 months ago

Hmm, I'm going to have to go with D on this one. The other options just seem like they would have the opposite effect.

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Owen

9 months ago

Agreed, it would lower barriers to entry for new suppliers.

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Freeman

9 months ago

That makes sense, less regulation would likely attract more suppliers.

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Carmela

9 months ago

D) De-regulation of a previously government-run industry

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Inocencia

10 months ago

I'm not sure why anyone would think a minimum wage or a requirement for large companies would increase the number of suppliers. That just doesn't make sense.

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Mozell

8 months ago

B) High and increasing levels of investment required to enter the market

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Lanie

8 months ago

I agree, de-regulation would definitely attract more suppliers.

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Matthew

9 months ago

D) De-regulation of a previously government-run industry

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Vernell

9 months ago

A) Introduction of minimum wage regulations

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Minna

10 months ago

But what about option A, introduction of minimum wage regulations? Wouldn't that also attract more suppliers by ensuring fair wages for workers?

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Lashon

11 months ago

I agree with Jesusita. When a previously government-run industry is de-regulated, it allows more companies to enter the market, thus increasing the number of suppliers.

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