Transaction Costs and Vertical Integration

  • T. V. S. Ramamohan Rao


Vertical integration into input production generally entails
  1. (a)

    the avoidance of monopolistic price cost margins of input suppliers,

  2. (b)

    a reduction in the market related and/or firm specific transaction costs, and

  3. (c)

    lower costs attributable to economies of scale and scope resulting from joint production.



Transaction Cost Marginal Cost Internal Pressure Demand Curve Vertical Integration 


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Copyright information

© Springer-Verlag Berlin · Heidelberg 1989

Authors and Affiliations

  • T. V. S. Ramamohan Rao
    • 1
  1. 1.Indian Institute of TechnologyKanpurIndia

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