A firm chooses vertical integration to reduce all of the following costs, EXCEPT:
a. the cost of investing in diversified assets.
b. the cost of finding a trading partner.
c. the cost of devising and enforcing an agreement.
d. the cost of evaluating the other party's performance.
A
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The difference between a tariff and a quota is that the revenue from the tariff goes to the
A) domestic consumer. B) domestic producer. C) domestic government. D) foreign producers. E) foreign government.
If the economy enters a recession
A) frictional unemployment increases. B) structural unemployment decreases. C) cyclical unemployment increases. D) the number of workers on layoff decreases.
Which of the following statements about the characteristics of debt and equity is FALSE?
A) They can both be long-term financial instruments. B) They can both be short-term financial instruments. C) They both involve a claim on the issuer's income. D) They both enable a corporation to raise funds.
If the market value of a firm is $6 billion and Tobin's q is equal to 2, then the replacement cost of installed capital must be ________
A) $2 billion B) $3 billion C) $9 billion D) $18 billion