The Disadvantage of Vertical Integration Is That

question 145

Multiple Choice

The disadvantage of vertical integration is that:

• A) relationship-specific exchange may cause hold-up.
• B) long-term contracts may be inflexible.
• C) the principal-agent problem causes shirking.
• D) firms no longer specialize in what they do best.

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Definitions:

Entrainers

External cues or agents that synchronize biological rhythms to the environment, such as light influencing circadian rhythms.

Entrained Circadian Rhythm

The synchronization of the body's natural circadian rhythms (sleep-wake cycle and other biological processes) with the environment, such as the light-dark cycle.

Blind

Blindness is the condition of lacking visual perception due to physiological or neurological factors.

Faster

Operating or moving at high speed or more quickly than is usual, often used to compare the speed or efficiency of processes, objects, or people.