A firm with a ________ ratio between value added and sales has brought ________ of the value-creating activities associated with its business inside its boundaries, consistent with a high level of vertical integration.
A) low; many
B) high; many
C) medium; many
D) medium; few

Question

Quizplus · Accepted Answer

A high ratio between value added and sales indicates that the firm is able to capture a significant portion of the value it creates, which suggests vertical integration. A high degree of vertical integration means that the firm has brought many value-creating activities inside its boundaries (such as production, distribution, and marketing), rather than relying on outside suppliers and contractors.

A Firm with a ________ Ratio Between Value Added and Sales