The Main Reason for a Vertical Merger Is

question 46

Multiple Choice

The main reason for a vertical merger is:

• A) avoidance of fixed costs.
• B) elimination of costs of searching for input prices.
• C) control over input prices.
• D) All of the options.

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Definitions:

Direct Labor Cost

Expenses directly attributable to the production of goods or services, including wages and salaries for workers who physically produce products.

Cell Phone Manufacturer

A company engaged in the production of mobile phones, involving processes from design and development to assembly and testing of devices.

Assembly Worker

An employee tasked with the assembly of components into finished products, typically working on a manufacturing line.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and constitute a significant portion of the costs of goods produced.