Multiple Choice
According to the scenario, one way in which the government influences Monsanto's business is:
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7. Externalities
Public Solutions to Externalities
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The elimination of organizations that operate between the producer and the consumer is called _____.
A
disintermediation
B
subsidization
C
privatization
D
regulation
Verified step by step guidance1
Understand the key terms in the question: the problem asks for the term that describes the removal of intermediaries between producers and consumers.
Recall that intermediaries are organizations or agents that facilitate the distribution or sale of goods from producers to consumers, such as wholesalers or retailers.
Identify the term that specifically means removing these intermediaries, which is 'disintermediation'.
Recognize that 'subsidization' refers to financial support, 'privatization' refers to transferring ownership from public to private sector, and 'regulation' refers to government rules, none of which describe removing intermediaries.
Conclude that the correct term for eliminating organizations between producer and consumer is 'disintermediation'.
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