Which of the Following Is True of Vertical Integration

question 101

Multiple Choice

Which of the following is true of vertical integration?

• A) It does not provide long-term competitive advantage.
• B) A firm risks losing its proprietary product technology to competitors.
• C) A firm can leverage its dynamic capabilities to produce a range of elegantly designed products.
• D) Substantial investments in specialized assets are required to manufacture a component.
• E) The greater the number of subunits in an organization, the more problems controlling those units.

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Definitions:

Preferences and Social Norms

The combination of individual desires and the influence of societal expectations on consumer behavior.

Factor of Production

An input used in the production of goods or services, such as labor, capital, land, or entrepreneurship.

Input

Resources such as labor, materials, and capital used in the production of goods and services.

Backward-Bending

Refers to a labor supply curve that bends backwards at higher wage rates, indicating that higher wages can lead to less labor supplied due to increased leisure preference.