Next class

Yes we are having class next week. One problem I will cover in more detail is the motives for horizontal and vertical integration. Here is a thought problem to work through in the meantime. Let's say you own a set of apartment buildings. You can either call a plumber each time a problem arises, or have a plumber on permanent payroll (let's assume you have enough buildings so that this is a feasible option).

Under what conditions should you call a plumber each time and under what conditions should you put a plumber on payroll?

That's a problem with a plumber. You can make progress by switching the job description, and the associated capital goods, and then see what happens to your answer.