A company's decision regarding the degree to which it should vertically integrate or be more specialized is basically a trade-off between _____ and _____.
A)reduced costs of production; increased sales
B)greater efficiency in market power; reduced incentives for innovation
C)pushing hold-up problems onto rivals; reducing incentives for growth over time
D)eliminating the bargaining power of customers and suppliers; providing incentives for efficiency and profit

Question

Quizplus · Accepted Answer

The correct answer is D) eliminating the bargaining power of customers and suppliers; providing incentives for efficiency and profit. Vertical integration can help a company reduce or eliminate the bargaining power of its suppliers and customers, thereby potentially increasing its efficiency and profits. This is because vertical integration allows a company to control more aspects of its supply chain, reducing dependency on external entities.

A Company's Decision Regarding the Degree to Which It Should