What Kind of Integration Is Vertical Integration

question 62

Multiple Choice

What kind of integration is vertical integration?

• A)When the government outlaws discrimination against both short and tall people.
• B)When two firms join together in a conglomerate merger.
• C)When two firms related in the production process are owned by the same firm, as in a plywood manufacturer owning a logging company.
• D)All of the above

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Definitions:

Implicit Costs

The opportunity costs that arise from using resources that could have been employed in an alternative use but were instead utilized in the current operation without direct payment.

Explicit Costs

Direct, out-of-pocket payments for goods and services used in the production of a product or provision of a service.

Accounting Profit

The difference between total monetary revenue and total monetary costs, excluding the consideration of opportunity costs.

Explicit Costs

These are the direct, clear expenses related to business operations, such as salaries, utilities, and rent, that are easily quantifiable.