A firm is likely to be among the first in its industry to vertically disintegrate an exchange when
A) the firm concludes that the level of specific investment required to manage an economic exchange is high.
B) the firm believes that the exchange is costly to imitate.
C) the level of uncertainty about the value of an exchange has increased.
D) the firm believes that the exchange is rare.

Question

Quizplus · Accepted Answer

Vertical disintegration is more likely when uncertainty about the value of an exchange increases, as firms may prefer flexibility and reduced risk over maintaining control through vertical integration.

A Firm Is Likely to Be Among the First in Its