Vertical integration can reduce transaction costs through all of the following ways except which one?
A)decreasing search cost
B)increasing the complexity of coordination
C)increasing information and control
D)decreasing the incentive for litigation

Question

Quizplus · Accepted Answer

Increasing the complexity of coordination, which can occur due to vertical integration, can actually increase transaction costs instead of reducing them. The other options of decreasing search cost, increasing information and control, and decreasing the incentive for litigation are all ways in which vertical integration can reduce transaction costs.

Vertical Integration Can Reduce Transaction Costs Through All of the Following