A Firm Acquiring Another Firm at a Different Level of Activity

question 81

Multiple Choice

A firm acquiring another firm at a different level of activity within a channel of distribution is called:

• A) vertical integration.
• B) a tying contract.
• C) dual distribution.
• D) horizontal integration.
• E) a regrouping activity.

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Definitions:

Optimal Combination

An optimal combination refers to the selection of goods, services, or inputs that provides the highest satisfaction or return for a given cost or the lowest cost for a given level of satisfaction or output.

Inputs

Inputs are the resources used in the production process to produce goods or services, including labor, capital, materials, and energy.

Capital Intensive

A description of industries or businesses that require large investments in capital assets to produce goods or services.

Variable Cost

Costs that change in proportion to the level of production or activity within a company.