Vertical integration exists when a company produces its own inputs (forward integration)or owns its own source of output distribution (backward integration).

Question

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Vertical integration is a strategy adopted by companies to control the production of inputs or distribution of outputs. When a company produces its own inputs, it is called forward integration, and when it owns its own source of output distribution, it is known as backward integration. Therefore, the statement "Vertical integration exists when a company produces its own inputs (forward integration) or owns its own source of output distribution (backward integration)" is true.

Vertical Integration Exists When a Company Produces Its Own Inputs