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Vertical integration: how teams become increasingly involved in reducing revenue they need to share, benefits owners and consumers. Two monopolies coming together.
Vertical integration means that the two monopolies apply their power together, so instead of downstream paying a monopoly price, then upping the price again, upstream sells to downstream at a lower price and downstream sells for a lower monopoly price. This lowers price sale is called a transfer price. Result, monopoly prices stay lower, therefore it is more affordable for the consumer. When teams and broadcasting use transfer prices then we have to be skeptical of the accounting equation.
This document contains various important questions and their appropriate answers in the subject field of Economics.
Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.
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