An Arrangement Between Two or More Firms That Establishes an Exchange

question 47

Multiple Choice

An arrangement between two or more firms that establishes an exchange relationship but has no joint ownership involved is called a:

• A) network
• B) trade association
• C) consortia
• D) joint venture
• E) strategic alliance

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Definitions:

Upstream Firms

Companies involved in the early stages of production or supply chain, such as raw material extraction or initial processing, before manufacturing.

Double Marginalization

A scenario in which two or more firms at different stages of a supply chain apply their own markups, leading to inefficiencies and inflated prices for consumers.

Retail Price

The cost at which goods or services are sold to the public, typically higher than the wholesale price to include a markup for profit.

Manufacturer Markup

The difference between the cost to produce a good and its selling price, often added by manufacturers to cover costs and generate profit.