Two movie studios combining to form one larger studio is an example of which of the following?
A)forward vertical integration
B)horizontal integration
C)backward vertical integration
D)diversification

Question

Quizplus · Accepted Answer

Horizontal integration refers to the merger of companies operating in the same industry to gain advantages such as economies of scale and increased market power. In this case, the merger of movie studios involves combining two companies operating in the same industry, making horizontal integration the best choice. Forward vertical integration involves merging with a company that operates downstream in the supply chain, while backward vertical integration entails merging with a company that operates upstream in the supply chain. Diversification, on the other hand, refers to expanding a company's operations into different industries or markets.

Two Movie Studios Combining to Form One Larger Studio Is