Vertical Integration Can Reduce Transaction Costs Through All of the Following

question 48

Multiple Choice

Vertical integration can reduce transaction costs through all of the following ways except which one?

• A)decreasing search cost
• B)increasing the complexity of coordination
• C)increasing information and control
• D)decreasing the incentive for litigation

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Definitions:

Risk Minimization

The process of identifying, assessing, and taking steps to reduce or eliminate risks to an organization.

Internal Validation

The process of reviewing and assessing the internal procedures, controls, and operations of an organization to ensure they are effective and in line with set standards or goals.

Supply Savings

The reduction in costs achieved through efficient supply management practices, including negotiation, strategic sourcing, and procurement efficiencies.

Market Changes

Refers to the fluctuations and transformations in the dynamics of a market, influenced by factors like consumer behavior, economic policies, and technological advancements.