The Primary Factor Determining the Degree of Vertical Integration in a Firm

question 25

Multiple Choice

The primary factor determining the degree of vertical integration in a firm is:

• A)Transaction costs
• B)Administrative costs
• C)The relative level of transaction costs to administrative costs
• D)The nature of an industry

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Definitions:

Intrinsically Important

Valued for its own sake or essence, rather than for its utility in achieving something else.

Abstract Thinking

The ability to consider concepts, possibilities, and ideas that are not immediately visible, tangible, or concrete.

Ethnic Minority

A group within a community which has different national or cultural traditions from the majority of the population.

Economically Impoverished

A state of living with insufficient financial resources to meet basic needs such as food, shelter, and clothing, often leading to a lower standard of living.