The manager of Slick Lens, a sunglasses manufacturer, notices that the cost to purchase lenses for their sunglasses in the spot market has increased. As a result of the change, which of the following is true?
A)The manager has more of an incentive to integrate forward.
B)The manager has less of an incentive to integrate backward.
C)The manager has less of an incentive to integrate forward.
D)The manager has more of an incentive to integrate backward.

Question

Quizplus · Accepted Answer

If the cost to purchase lenses in the spot market has increased, it means that purchasing lenses from suppliers has become more expensive. As a result, the manager of Slick Lens may have more of an incentive to integrate backward and start producing their own lenses, therefore avoiding the increased cost of purchasing them from suppliers.

The Manager of Slick Lens, a Sunglasses Manufacturer, Notices That