An Attempt to Explain That Vertical Integration Is More Efficient

question 14

Multiple Choice

An attempt to explain that vertical integration is more efficient than contracting for goods and services in the marketplace when the transaction costs of buying goods on the open market becomes too great has been proposed by

• A) population theory.
• B) institution theory.
• C) freakonomics.
• D) transaction cost economics.
• E) transaction growth theory.

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Definitions:

Proximity

The state, quality, or fact of being near or close in space, time, or relationship.

Advertising Costs

Expenses incurred by a business to promote its products, services, or brand through various media channels.

Franchisees

Individuals or entities that purchase the rights to operate a business under the franchisor's brand and system.

Franchisors

Companies that grant licenses to third parties to conduct business under their trademark and business model.