Vertical integration occurs in a merger when the companies that merge:
A)had a buyer-seller relationship prior to the merger, with each covering a different stage in a production chain.
B)are different sizes, with one being significantly larger than the other.
C)produce different types of products, such as one producing a service and the other a tangible good.
D)each produce different products whose productions are unrelated but are consumed together.

Question

Quizplus · Accepted Answer

Vertical integration involves the merger of companies that were previously involved in different stages of a production chain, such as a supplier and a manufacturer. This creates a unified supply chain and enables the merged company to control more aspects of the production process.

Vertical Integration Occurs in a Merger When the Companies That