ABSTRACT
Thus, a vertical restraint is not limited to distribution arrangements between a producer and its distributors; it may extend to contractual arrangements between a producer and suppliers of the sources for its products. In reality, the vertical chain often involves, to a large extent, several varieties of specialized support service providers such as accounting, finance, human resources and provision of legal services – however, these steps are, in theoretical examination, placed outside the vertical chain. Economists generally regard any early step or pre-production stages in the vertical chain as being upstream, and any later or post-production stages as downstream. They also regard the decision of a firm to obtain these series of production and supply on the vertical chain independently or to integrate them under one roof as a make-or-buy decision.
