In vertical integration, backward integration occurs when a firm
A) owns or controls the inputs it uses.
B) owns the distribution channels for its main products.
C) controls the primary activities involved.
D) controls the customers for its products.

Question

Quizplus · Accepted Answer

Backward integration involves a firm taking ownership or control of the inputs it uses in the production process. This can help the firm have greater control over its supply chain and potentially reduce costs. Option B refers to forward integration, C refers to vertical integration in general, and D is not a type of integration.

In Vertical Integration, Backward Integration Occurs When a Firm