Birds Eye did not backward integrate into farming produce for two reasons: (1) farming is an industry where it is difficult to monitor effort, and (2) there is no need to vertically integrate backwards since the produce industry it is NOT a ___________ market (please select one):

Question

Birds Eye did not backward integrate into farming produce for two reasons: (1) farming is an industry where it is difficult to monitor effort, and (2) there is no need to vertically integrate backwards since the produce industry it is NOT a ___________ market  (please select one):

BlackTom AI · Accepted Answer

Question restatement: Birds Eye did not backward integrate into farming produce for two reasons: (1) farming is an industry where it is difficult to monitor effort, and (2) there is no need to vertically integrate backwards since the produce industry it is NOT a ___________ market (please select one):

Options to evaluate: ["specialized", "large", "thin", "thick"]

Analysis of each option:
- Option 1: specialized
  This would imply the produce market is a specialized market, i.e., narrow in scope with highly specific products or customers. While the produce sector can have specialized segments (e.g., certain crops or regional markets), the claim in the prompt about not needing backward integration because the market is not of a certain broad type aligns more with liquidity concepts (how easily assets can be traded) rather than specialization. Therefore, labeling the market as specialized does not directly support the reasoning given (difficult to monitor effort and lack of need for integration) and misaligns with the standard framing of vertical integration decisions.
- Option 2: large
  Describing the market as large emphasizes size, not liquidity or monitoring concerns. A large market does not inherently address the question of why backward integration would or would not be pursued based on monitoring effort or the need to vertically integrate. This makes it an unsuitable fit for the blank in the sentence, and it does not coherently complete the idea being discussed.
- Option 3: thin
  The term thin market refers to low liquidity or a market with relatively few participants and limited trading activity. The prompt states there is no need to vertically integrate backwards since the produce industry it is NOT a _____ market. Saying the market is not thin fits logically: if the market is not thin (i.e., it is relatively liquid and active), a firm may rely on market transactions rather than internalizing production. This aligns with the two given reasons: monitoring effort is challenging in farming, and if the market is reasonably liquid, there is less incentive to backward integrate. Thus, this option coherently completes the sentence and matches common economic reasoning about vertical integration decisions.
- Option 4: thick
  Thick is sometimes used informally to describe a relatively liquid or active market as well, though it is not as standard a counterpart to thin in this exact economic context. Using thick would read as the market being not thick, which would be an awkward way to express the intended contrast with thin, and it does not as directly capture the conventional notion of liquidity used in vertical integration literature. This makes it a less suitable and less precise choice for completing the sentence given the typical terminology.

Synthesis: Among the provided options, thin best completes the statement in a way that aligns with the reasoning that a non-illiquid (i.e., not a thin) market reduces the perceived need for backward integration, especially when monitoring effort is challenging in farming. The other options either misrepresent the concept (specialized, large) or rely on a less standard pairing (thick) that does not fit as smoothly with the motivation described.

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Birds Eye did not backward integrate into farming produce for two reasons: (1) farming is an industry where it is difficult to monitor effort, and (2) there is no need to vertically integrate backwards since the produce industry it is NOT a ___________ market (please select one):

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