as a 36. When a farmer operates a stall in a local farmers' market; this may be regarded form of backward integration. True or False? 37. The vertical scope of a firm relates to: a. The extent to which a firm spans stages of the industry value chain b. The proportion of the firm's inputs that are produced in-house c. The size of the firm's value added d. The number of hierarchical layers of the firm's management structure 38. The primary factor determining the degree of vertical integration in a firm is: a. Transaction costs b. Administrative costs c. The relative level of transaction costs to administrative costs d. The nature of an industry 39. When a winery opens a tasting room through which it sells its wine to visitors, this represents a strategy of: a. Backward integration b. Forward integration c. Partial integration d. Diversification 40. Vertical integration by Zara, the main division and brand of the Spanish clothing firm Inditex, illustrates: a. The potential of vertical integration to offer flexibility in responding to seasonal fluctuations in demand b. The potential for vertical integration to offer flexibility in responding to rapid changes in customer product preferences c. The potential for vertical integration to overcome problems arising from the need for transaction-specific investments by garment manufacturers d. The potential for vertical integration to exploit technical economies from co-locating adjacent processes