In economics, what is the term for a firm's strategy of controlling or owning each step of the production process, from raw materials to final product distribution?

• A. Vertical integration
• B. Horizontal integration
• C. Monopolistic competition
• D. Price discrimination

Answer: (A)

Verified step by step guidance

1. Understand the concept of integration in the context of a firm's production and distribution processes.
2. Recognize that 'Vertical integration' refers to a firm's strategy of controlling or owning multiple stages of production, from raw materials to final product distribution.
3. Differentiate 'Vertical integration' from 'Horizontal integration,' which involves acquiring or merging with competitors at the same stage of production.
4. Note that 'Monopolistic competition' describes a market structure with many firms selling differentiated products, not a firm's control over production stages.
5. Understand that 'Price discrimination' is a pricing strategy where a firm charges different prices to different consumers, unrelated to production control.