A Disadvantage of Vertical Integration Is That by Pooling Demand

question 282

True/False

A disadvantage of vertical integration is that by pooling demand for parts from a number of companies, a supplier may be able to enjoy economies of scale that result in higher quality and lower cost than if every company makes its own parts.

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Definitions:

Employment Discrimination

Unfair treatment of employees or job applicants based on race, gender, age, religion, nationality, physical disabilities, or sexual orientation, rather than on their qualifications or performance.

Productivity Factors

Elements that contribute to the efficiency with which inputs are converted into outputs, such as technology, innovation, and labor skills.

Mean Earnings

The average income that a group of individuals or entities earns over a specified period.

Earnings Ratio

A financial metric comparing one aspect of a company's financial performance, such as earnings, to another, such as its share price.