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JAMB Commerce 1994 Question 6

Question 6

Business Combinations

Which of the following takes place when firms producing at different stages in the same industry combine?

  1. A.conglomeration
  2. B.vertical integration
  3. C.horizontal integration
  4. D.cartel.
Show the answer and explanation

Answer: B (vertical integration)

Explanation

Vertical integration joins firms at different stages of the same production chain, e.g. a farm, a mill and a bakery.