Question 4
Business CombinationsWhen a company buys up firms supplying it with raw materials, this is an example of
- A.horizontal integration
- B.a holding company
- C.backward integration
- D.consortium
- E.lateral merger
Show the answer and explanation
Answer: C (backward integration)
Explanation
Taking over firms at an earlier stage of production, such as raw material suppliers, is backward (vertical) integration.