Quiz on Market Integration

What is market integration?

• The process of increasing prices in different markets

• The process of reducing competition between companies

• The process of eliminating trade agreements

• The process of linking markets to create a larger marketplace

What happens to prices when markets are integrated?

• They increase significantly

• They decrease across the board

• They become completely independent

• They tend to move together

Which of the following is a benefit of market integration?

• Higher barriers to entry

• Decreased competition

• Increased economic efficiency

• Reduced supply security

What is an example of a common market?

• European Common Market

• United Nations

• North American Free Trade Agreement

• World Trade Organization

What is horizontal integration?

• Diversifying into unrelated markets

• Controlling multiple stages of production

• Acquiring suppliers in the production chain

• Merging with another company in the same industry

Which of the following is a benefit of horizontal integration?

• Reduced product offerings

• Decreased economies of scale

• Higher operational costs

• Increased market share

What is a drawback of horizontal integration?

• Enhances flexibility

• Increases market competition

• Can lead to monopolies

• Reduces market power

What does vertical integration involve?

• Reducing operational efficiency

• Increasing market competition

• Merging with companies in different industries

• Owning multiple stages of the supply chain

What is backward integration?

• Merging with competitors

• Acquiring unrelated businesses

• Controlling the distribution of products

• Controlling the products used in production

Which company is an example of vertical integration?

• Apple

• JetBlue

• Facebook

• Coca-Cola