Which of the Following Is a Disadvantage of Vertical Integration

question 106

Multiple Choice

Which of the following is a disadvantage of vertical integration?

• A) It fails to protect a firm's proprietary product technology.
• B) Firms lose out on the opportunities to build dynamic capabilities.
• C) It is difficult to determine appropriate prices for goods transferred to subunits within a firm.
• D) It fails to facilitate investments in highly specialized assets.
• E) It does not allow a firm to exercise tight control over its production process.

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Definitions:

Regulation

Rules or directives made and maintained by an authority to control or govern behavior.

Immune Response

The body's defensive reaction to foreign substances or pathogens, involving immune cells and antibodies.

Tiredness

A state of fatigue or exhaustion that results from physical or mental exertion.