JAMB Economics 2014 Objective — Question 42
Question 42 of 50 from the Joint Admissions and Matriculation Board (JAMB) Economics 2014 Objective paper, with the correct answer and a full explanation.
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Firms embark on vertical integration in order to
- A. enjoy economies of large-scale productionCorrect
- B. take over markets formally controlled by other firms
- C. prevent other firms from entering the market
- D. reduce advertisement and marketing cost
Explanation
Vertical integration is the type of merger in which firms at different stages of production merge together. This makes it one big firm, and it will therefore reap the benefit of low cost of production which is advantageous to economies of scale.
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