Vertical integration:
A)is illegal in Canada.
B)is not a solution to the hold- up problem.
C)is accomplished via long- term contracts.
D)is subject to transaction costs.

Question

Quizplus · Accepted Answer

Vertical integration is subject to transaction costs, which refers to the costs of making transactions and exchanges, such as negotiating contracts and managing relationships between different stages of production. This is one of the factors that companies need to consider when deciding whether to vertically integrate or not.

Vertical Integration