A Disadvantage of Vertical Integration Is That It

question 38

Multiple Choice

A disadvantage of vertical integration is that it

• A) creates exit barriers.
• B) improves coordination of activities.
• C) decreases demand for the firm's products and services.
• D) creates entry barriers.
• E) avoids time consuming tasks.

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Definitions:

Sales Discounts

Reductions in the selling price offered to customers, often as an incentive to encourage prompt payment.

Cash Discount

A deduction from the total amount on an invoice allowed by a vendor to encourage prompt payment.

Accounts Receivable

The money owed to a business by its clients for goods or services delivered but not yet paid for.

Sales Discounts

A reduction in the price of goods or services offered by a seller to a buyer, typically used to encourage prompt payment or to reward customers for bulk purchases.