Horizontal and Vertical Relations

question 49

Essay

Horizontal and Vertical Relations. Intel Corp. designs, manufactures and markets microcomputer components and related products at various levels of integration. Intel's principal components consist of silicon-based semiconductors etched with complex patterns of transistors. Microsoft Corp. develops, manufactures, licenses and supports a range of software products, including scalable operating systems, server applications, business and consumer productivity applications, software development tools and Internet software and technologies. Together, Intel and Microsoft Corp. are sometimes described as comprising the "Wintel" monopoly.
A. Describe how Intel and Microsoft share important elements of a vertical relationship.
B. Describe how Intel and Microsoft have important elements of a horizontal relationship.

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Definitions:

Unit Variable Costs

Costs that vary directly with the level of production or output, such as materials and labor, calculated on a per unit basis.

Static Budget

A financial plan that does not change or adjust over the period, even when there are significant changes in the levels of activity.

Variable Costs

Expenses that change in proportion to the level of activity or production volume.

Static Budget

A budget that does not change or adapt over time, based on the assumption of a fixed level of activity.