Multiple Choice
Which of the following best describes a company's business model in the context of economics?
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0. Basic Principles of Economics
Introduction to Economics
Multiple Choice
Apple acquiring P.A. Semi is an example of which type of business integration?
A
Conglomerate merger
B
Market segmentation
C
Vertical integration
D
Horizontal integration
Verified step by step guidance1
Step 1: Understand the types of business integration. Horizontal integration occurs when a company acquires or merges with a competitor in the same industry and at the same stage of production.
Step 2: Vertical integration happens when a company acquires or merges with another company that operates at a different stage of the production process, either upstream (suppliers) or downstream (distributors).
Step 3: Conglomerate merger involves companies from unrelated industries combining, which diversifies their business activities without direct connection in the production chain.
Step 4: Market segmentation is a marketing strategy, not a type of business integration, where a company targets different groups of consumers.
Step 5: Since Apple acquiring P.A. Semi involves Apple integrating a supplier of semiconductor chips (an upstream stage in production), this is an example of vertical integration.
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