Question

If Iron Horse Helmets (IHH) were to contract with a Chinese manufacturing firm to provide IHH with superior quality helmets for sale in the United States but discovered that the shipments were actually of inferior quality when they were received, this experience would support which type of justification for or against vertical integrationa. For vertical integration, to reduce monitoring costs.b. Against vertical integration, because challenges would be worse inside the firm.c. Against vertical integration, because IHH lacked the relevant resources.d. For vertical integration, to avoid the hold-up problem.

Answer 1

c. Against vertical integration, because IHH lacked the relevant resources.

Step-by-step explanation:

IHH lacks the relevant resources to produce their own helmets otherwise they wouldn´t be contracting with a Chines firm to make them the Helmets, in that case this is the best option against vertical integration, the best claim in favor of vertical integration would be the fact of not having to worry about the quality of the helmets.