​Vertical Relationships Can Increase Profits Through

question 43

Multiple Choice

​Vertical relationships can increase profits through

• A)​preventing firms from evading regulation
• B)eliminating a double-markup problem
• C)making the incentives of manufacturers and retailers unaligned
• D)​preventing price discrimination

---

Definitions:

Average Total Cost

The total cost of production divided by the quantity produced, representing the cost per unit of output.

Short Run

In economics, a period where at least one input, such as plant size or capital, is fixed and cannot be changed, contrasting with the long run where all inputs can vary.

Short Run

A period of time in economics during which at least one input is fixed, limiting the immediate capacity of businesses to adjust to market changes.

Losses

Financial reductions resulting from the operation of a business, particularly when expenses exceed revenues.