Vertical integration is attractive when
A)internal administrative costs are higher than transaction costs.
B)transaction costs and internal administrative costs are equal.
C)transaction costs are higher than internal administrative costs.
D)search costs are higher than monitoring costs.

Question

Quizplus · Accepted Answer

If transaction costs are higher than administrative costs, that is, those costs incurred when coordinating the activities elsewhere in the value chain, vertical integration becomes an attractive strategy.

Vertical Integration Is Attractive When