Chevrolet has begun producing a car known as the Wildfire. Chevrolet signed contracts with its suppliers for fixed priced steel to build the car. The first year's sales have been much higher than expected. When Chevrolet returns to its steel suppliers for more steel, the steel suppliers will charge Chevrolet

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Business

Deon Hanson

5 January, 06:03

Chevrolet has begun producing a car known as the Wildfire. Chevrolet signed contracts with its suppliers for fixed priced steel to build the car. The first year's sales have been much higher than expected. When Chevrolet returns to its steel suppliers for more steel, the steel suppliers will charge Chevrolet

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Answers (1)

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Aldo Ruiz · Answer 1

The steel suppliers will charge the same price.

Explanation:

Chevrolet has started producing a car named wildfire. The company signed a contract with steel suppliers to purchase steel at a fixed price.

The first year sales of the car is much higher than expected. So Chevrolet will produce more.

It will need more steel to increase production. The demand for steel will increase. But the suppliers cannot increase the price since they have signed a contract. So they will charge the same price.