If JNK steel buys Ramirez Iron Ore to assure itself of a constant flow of ore,it will be an example of a _____.
A)conglomerate company
B)domestic company
C)vertical merger
D)subsidiary corporation

Question

Quizplus · Accepted Answer

A vertical merger involves the combination of two companies that are in different stages of the production process but are part of the same supply chain. In this case, JNK steel, which is a steel manufacturing company, is acquiring Ramirez Iron Ore, which is involved in the production of iron ore. This will enable JNK to control the supply of inputs that go into the production process, thereby reducing costs and increasing efficiency.

If JNK Steel Buys Ramirez Iron Ore to Assure Itself