Methods of Procuring Inputs Spot exchange When the buyer and seller of an input meet, exchange and then go their separate ways Contracts A legal document that creates an extended relationship between a buyer and a seller Vertical Integration a When a firm shuns other suppliers and chooses to produce an input internally Michael R Baye, Managerial Economics and Business Strategy, 3e. CThe McGraw-Hill Companies, Inc, 1999Michael R. Baye, Managerial Economics and Business Strategy, 3e. ©The McGraw-Hill Companies, Inc. , 1999 Methods of Procuring Inputs • Spot Exchange  When the buyer and seller of an input meet, exchange, and then go their separate ways. • Contracts  A legal document that creates an extended relationship between a buyer and a seller. • Vertical Integration  When a firm shuns other suppliers and chooses to produce an input internally