The strategy whereby a firm makes most of its own inputs is called
A) Economies of scope
B) Horizontal integration
C) Economies of scale
D) Vertical integration

Question

Quizplus · Accepted Answer

The strategy whereby a firm makes most of its own inputs is called vertical integration. This is a strategy where a company owns the entire supply chain, from raw materials to the final product. This helps the firm to reduce costs, improve quality control, and ensure a steady supply of inputs. Horizontal integration refers to a strategy where a company acquires competitors at the same level of the value chain to achieve economies of scale. Economies of scope refer to cost savings achieved by producing a variety of products or services. Economies of scale refer to cost savings achieved by producing large volumes of a product or service.

The Strategy Whereby a Firm Makes Most of Its Own