Suppose we have two firms (Firm 1 & Firm 2)enter into a transaction where Firm 1 is upstream of firm 2 in a vertical chain.What term best describes the organization of the transaction where Firm 1 owns the assets of Firm 2?
A)Backward Integration
B)Forward integration
C)Nonintegration
D)Contractually unbound
E)Contractually bound

Question

Quizplus · Accepted Answer

Forward integration occurs when a company expands its operations to include control over the direct distribution or supply of its products, which in this case means Firm 1 owning the assets of Firm 2, which is downstream in the vertical chain.

Suppose We Have Two Firms (Firm 1 & Firm 2)enter