By vertically integrating, two firms can
A)increase market share.
B)avoid holdup problems.
C)limit the problems inherent in moving too quickly.
D)avoid antitrust issues.

Question

Quizplus · Accepted Answer

Vertically integrating can help firms avoid holdup problems by controlling the entire production process and not relying on external suppliers or distributors. This can lead to more efficient and reliable production, which could increase market share, but that is not necessarily a direct result of vertical integration. Limiting problems inherent in moving too quickly and avoiding antitrust issues may be potential benefits of vertical integration, but they are not the primary reason for pursuing it.

By Vertically Integrating, Two Firms Can