Which of the Following Is Not a Benefit of Tapered

question 8

Multiple Choice

Which of the following is not a benefit of tapered integration?

• A)It expands the firm's input and/or output channels without requiring substantial capital outlays
• B)Allows the firm to use information about the cost and profitability of its internal channels to help negotiate contracts with independent channels
• C)Lets the firm motivate its internal channels by threatening to expand outsourcing and,at the same time,motivate its external channels by threatening to produce more in-house.
• D)Allows the firm to produce most efficiently in all circumstances
• E)Helps the firm protect itself against holdup by independent input suppliers

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Definitions:

Profit-Maximizing Output

The level of production at which a firm achieves the highest possible profit, determined by the point where marginal revenue equals marginal cost.

Minimum Level

The Minimum Level refers to the least amount, extent, or degree that is acceptable or achievable in a specific context.

Marginal Cost

The financial requirement for producing a supplementary unit of a product.

Average Total Cost

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