Contracting may not be preferable to vertical integration

Assignment Help Business Economics

Reference no: EM13852513

Contracting may not be preferable to vertical integration because of which of the following conditions:

a. Complete contracting eliminates flexibility.

b. Incomplete contracting may result in large transactions costs that dissipate profits.

c. The creation of quasi--rents through contracting attracts competitors to the market.

d. Integration eliminates the need for negotiation regarding the allocation of resources in the production function.

e. None of the above explains why contracting may not be preferable to vertical integration.

Reference no: EM13852513

Questions Cloud

Money demand is greater than the real money supply : If the real money demand is greater than the real money supply, interest rates must rise to reach equilibrium in the money market as institutions sell bonds to obtain more money. The federal government’s control of the money supply, which influences ..

Total abatement cost for both companies under cost effective : Assume that two power plants, Firm 1 and Firm 2, release arsenic in a small urban community that exceeds the emissions standard. To meet the standard, 40 units of SO2 must be abated in total. The two firms face the following abatement costs: Determin..

Differentiate between the types of torts : Types of Torts- Differentiate between the types of torts and provide an example of a tort that would govern the sale of a faulty product

Velocity ?and aggregate output remain constant : If velocity ?(V) and aggregate output ?(Y) remain constant at $4 and $1,000 billion?, ?respectively, what happens to the price level ?(P) if the money supply? (M) declines from $425 billion to $350 billion?? Originally, what is the price level?

Contracting may not be preferable to vertical integration : Contracting may not be preferable to vertical integration because of which of the following conditions: Complete contracting eliminates flexibility.

Indifference curve is tangent to his budget constraint : Romans utility function os U(x,y)=6xy. The prices of goods x and y are $12 and $15. The indifference curve is tangent to his budget constraint, where he is consuming 20 units of good x. How many units of good y must he be consuming?

What are the advantages of e-commerce : What are the advantages of E-Commerce? Name all the specific cyber issues that have necessitated new laws? Explain what the term “spontaneous order” means? Name all of the factors that, according to Lawrence Lessig, govern both real space and cybersp..

The economy experiences a business cycle contraction : Explain how the following events will affect the demand for money according to the portfolio theories of money? demand: The economy experiences a business cycle contraction. Brokerage fees rise?, making bond transactions more expensive. The stock mar..

Consumer surplus in the market for video rentals change : Hollywood screenwriters negotiate a new agreement with movie producers stipulating that they will receive 10% of the revenue from every video rental of a movie they authored. They have no such agreement for movies shown on on-demand television. When ..

User Account

All Pages