Which of the Following Is NOT True of Vertical Integration

question 15

Multiple Choice

Which of the following is NOT true of vertical integration?

• A)Leads to greater flexibility to changing technology
• B)Can result in a loss of economies of scale
• C)Helps achieve control of the supply chain
• D)Reap profits of the supplier or distributor when there is an attractive return from investment

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Definitions:

Contingency Approach

A management theory stating that the best decisions are contingent on the situation and various variables involved.

External Cost

Costs incurred by third parties as a result of an economic transaction, which are not reflected in the transaction's market price, often necessitating government intervention.

Social Cost

The total cost to society, including both private costs incurred by individuals and external costs not accounted for by the market.

Demand Curve

A graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period.