Question

Factors that drive the vertical integration decision include which of the following:

Select one:

a. Scale and scope economies.

b. Product market scale and growth.

c. Asset specificity.

d. All of the above are driving factors.

e. None of the above are correct.

Answer 1

Q. Factors that derive the vertical integration decision include which of the following:-

Answer:- d) All of the above are driving factors.

Because, In economics, Vertical integration involves the creation of products or services in market and have control over its costs, suppliers, distributors,and all supply chain.It involves the processes like purchasing of a part of production. It uses the specific physical assets i.e., building, plant and machinery, etc. to produce the intermediate goods/products. It mets the scale and scope of economies by reducing costs ,buying bulk of quantities required, improving efficiency,sales and profitability also.

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