When a Multinational Corporation Controls the Raw Material Used in the Production

question 9

Multiple Choice

When a multinational corporation controls the raw material used in the production of its final good through a vertical integration,which of the following is most likely to happen?

• A)The MNC will obtain an uninterrupted supply of the raw material at the lowest possible cost.
• B)Consumers will pay lower prices for the good.
• C)The MNC will face anti-trust charges for owning firms that produce both the raw material and the final good.
• D)Consumers will pay higher prices for the good.

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Definitions:

Initial Value

The beginning amount or worth of an object, financial asset, or parameter before it undergoes any changes.

Final Value

An alternative term for future value,indicating the amount of money an investment will grow to at a future date, based on specified conditions.

Airfares

The cost of a passenger flight ticket.

Winnipeg

A city in Canada, known as the capital of the province of Manitoba, with a diverse economy and cultural scene.