A Firm That Is Vertically Integrated

question 9

Multiple Choice

A firm that is vertically integrated

• A)participates in more than one successive stage of production.
• B)has higher profits than firms that are not vertically integrated.
• C)produces all of its own inputs.
• D)relies on other firms to market its products.

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Definitions:

Consumer Surplus

The gap between what consumers are ready to pay in total and what they end up actually paying.

Consumer Surplus

The distinction between the total cost consumers are willing to offer for a good or service and the amount they eventually pay.

Surplus II

An excess amount of a product or resource compared to the demand, often resulting in lower prices.

Surplus III

An excess of production or supply over demand, often referring to goods in a market that exceed buyer requirements.