Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince

Exercise 9

Identify whether each of the following transactions involves spot exchange, contract, or vertical integration.
a. Barnacle, Inc., has a legal obligation to purchase 2 tons of structural steel per week to manufacture conveyor frames.
b. Exxon-Mobil uses the oil extracted from its wells to produce raw polypropylene, a type of plastic.
c. Boat Lifts R Us purchases generic AC motors from a local distributor.
d. Kaspar Construction-a home-building contractor-purchases 50 pounds of nails from the local Home Depot.