A Disadvantage of Vertical Integration Is That by Pooling Demand

question 282

True/False

A disadvantage of vertical integration is that by pooling demand for parts from a number of companies, a supplier may be able to enjoy economies of scale that result in higher quality and lower cost than if every company makes its own parts.

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Definitions:

Wealthy Nations

Countries characterized by a high level of economic wealth, typically measured by gross domestic product per capita or similar metrics.

Economic Development

The method through which a nation, region, or local community enhances its economic prosperity and life quality, aiming to meet specific goals and objectives.

Social Development

Refers to the process by which individuals and societies improve well-being, often through evolving social structures, policies, and norms.

Absolute Poverty

A condition where individuals lack the minimum amount of income or resources necessary to maintain basic living standards and needs.