The Manager of Steel Works Learns of a New Technological

Multiple Choice

The manager of Steel Works learns of a new technological interdependency between the first stage and the intermediate stage of production. If Steel Works currently contracts with another firm for the intermediate stage of production, which of the following is true?

A) The manager has less of an incentive to integrate backward.
B) The manager has more of an incentive to integrate forward.
C) The manager has less of an incentive to integrate forward.
D) The manager has more of an incentive to integrate backward.