A salad dressing company that buys a large olive grove to produce olive oil is practicing which of the following?
A)concentration
B)forward vertical integration
C)backward vertical integration
D)horizontal integration

Question

Quizplus · Accepted Answer

When a company acquires another company or operations that supply it with inputs (such as raw materials), it is engaging in backward vertical integration. In this case, the salad dressing company is buying an olive grove to produce olive oil, which is a raw material for its products, thus it is an example of backward vertical integration.

A Salad Dressing Company That Buys a Large Olive Grove