One of the most interesting games in the capitalist town is the notion of vertical integration or direct selling. If we start very small scale, one shop may operate as a bakery, and sell its bread and cakes to the local population. So the cost to the buyer is the cost of raw materials, labor, general overheads and a profit margin. Now let’s make this a larger operation. The bakery expands its production capacity and can make enough bread and cakes to supply five shops in the city. Although there’s
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