Once a Firm Buys Its Supplier in Order to Vertically

question 46

Multiple Choice

Once a firm buys its supplier in order to vertically integrate a process,

• A)the lack of a market removes the high-powered incentive of market forces to keep costs low.
• B)costs are certainly lower because the firm now knows what profit the supplier was making.
• C)the supplier will now offer a better service, since it's owned by its customer.
• D)it can close the purchasing department and save costs.

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Definitions:

Upwind

In the direction from which the wind is coming, often used to describe exposure to substances carried by the wind.

Nearby Slopes

Slopes in close proximity to a given location, often considered in geological studies and hazard assessments for potential risks like avalanches or landslides.

Island Arc

A curved chain of volcanic islands located at a tectonic plate margin, typically formed above a subducting plate.

Mid-Ocean Ridge

An underwater mountain range, formed by plate tectonics, featuring peaks separated by valleys with a central rift valley that forms at divergent plate boundaries.