Vertical integration may be motivated by all of the following except:
A) Upstream market power
B) Economies of ever wider spans of managerial control
C) Technological interdependencies
D) Reduced search and bargaining cost
E) The hold-up problem.

Question

Quizplus · Accepted Answer

Vertical integration is typically motivated by factors such as upstream market power, technological interdependencies, reduced search and bargaining costs, and the hold-up problem. However, economies of ever wider spans of managerial control are not a motivation for vertical integration; instead, they can be a concern as managing a larger, more integrated firm can become more complex and potentially less efficient.

Vertical Integration May Be Motivated by All of the Following