Which of the following is not a benefit of tapered integration?
A)It expands the firm's input and/or output channels without requiring substantial capital outlays
B)Allows the firm to use information about the cost and profitability of its internal channels to help negotiate contracts with independent channels
C)Lets the firm motivate its internal channels by threatening to expand outsourcing and,at the same time,motivate its external channels by threatening to produce more in-house.
D)Allows the firm to produce most efficiently in all circumstances
E)Helps the firm protect itself against holdup by independent input suppliers

Question

Quizplus · Accepted Answer

Tapered integration does not necessarily allow the firm to produce most efficiently in all circumstances. The optimal level of vertical integration may depend on various factors such as market conditions, technology, and economies of scale, and the firm needs to carefully evaluate the costs and benefits of each level of integration.

Which of the Following Is Not a Benefit of Tapered