When a firm decides to move away from ownership of a vertically integrated production process and begins to purchase supplies or other services from other businesses, it is said to be:
A. franchising.
B. outsourcing.
C. integrating downstream.
D. integrating upstream.
Answer: B
You might also like to view...
The short-run average cost curve shows the lowest possible average cost corresponding to each output level, assuming that all inputs are variable.
Answer the following statement true (T) or false (F)
Cost-reduction generates
a. Increases in long-run profitability b. Increases in long-run profitability only if the cost reduction is difficult to imitate c. Decreases in long run profitability d. No change in profitability
When a shortage occurs in the market for a good, quantity
a. demanded exceeds quantity supplied and the market mechanism pushes the price up, which in turn encourages more production and less consumption. b. supplied exceeds quantity demanded and the price falls, which encourages more production and less consumption. c. demanded exceeds quantity supplied and the market mechanism pushes the price down, which encourages more production and less consumption. d. supplied exceeds quantity demanded and the price rises, which encourages more production and less consumption.
Refer to Figure 11.3. Assume aggregate demand is represented by AD3 and full-employment output is $5.6 trillion. The equilibrium level of income is
A. $6.0 trillion. B. $0.8 trillion. C. $5.6 trillion. D. $5.2 trillion.