An Attempt to Explain That Vertical Integration Is More Efficient

question 40

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)transaction cost economics.
• D)trickle down economics.
• E)transaction growth theory.

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Definitions:

Consumer Price Index

A metric that tracks the average variation in prices that urban buyers pay for a selection of consumer products and services over a period.

Rising Cost

An increase in the price or expense of goods, services, or operational activities over time.

Labor Market

A marketplace where employers find workers and workers find jobs. It's the supply of available labor compared to the demand for it.

Fair Labor Standards Act

U.S. law that establishes minimum wage, overtime pay eligibility, recordkeeping, and child labor standards.