According to Alfred Chandler, Large Vertically Integrated Firms Dominated Much

question 16

Multiple Choice

According to Alfred Chandler, large vertically integrated firms dominated much of American manufacturing in the early 1900s because

• A) U.S. manufacturers sought to emulate the production practices of European manufacturers.
• B) U.S. tax laws created strong incentives for vertical integration.
• C) continuous-flow technologies were cost minimizing only when the inflow of inputs and the sale of outputs proceeded without interruption.
• D) larger firms were better able to fight the establishment of labor unions and collective bargaining arrangements.

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Definitions:

Intra-entity Transfer

Transactions of assets, services, or funds between divisions, departments, or affiliated entities within the same parent organization.

Equipment

Tangible property other than land or buildings that is used in operations, such as machinery, computers, vehicles, and furniture.

Cost of Goods Sold

The outlays directly connected to the making of goods a company markets, comprising both material and labor expenses.

Net Income

The remaining income of a company after subtracting all costs and taxes from its total income.