When firms that operate at different stages in the production of a commodity merge, this is known as

When firms that operate at different stages in the production of a commodity merge, this is known as "vertical integration". Vertical integration is a business strategy where a company expands its operations by acquiring companies that are involved in different stages of the same production process. For example, a car manufacturing company acquiring a tire company or a steel mill is a type of vertical integration because the tire company and steel mill are part of the same production process of making cars. The goal of vertical integration is to streamline the production process, increase efficiency, and reduce costs. By integrating different stages of production, the company can ensure a steady supply of raw materials and reduce the risk of supply chain disruptions.