Question

When a manufacturer of computers starts to produce its own computer components, the manufacturer engages in ______ vertical integration.

Answer 1

backward

Step-by-step explanation:

In this case, the manufacturer is engaged in backward vertical integration. This usually happens when a company has the required resources (such as money, materials, and labor) to complete tasks that are usually completed by third party companies. Most companies that do this expect to save on a large cost by doing the work themselves, while other companies do this as an effort to solve a problem or rush a product to market, usually due to the third party company being unable to fulfill their responsibilities. Either way, it is done with the end goal of increasing profits.