Answer to Question 1
For the past 40 years, the percentage of America's steel produced in vertically integrated firms like U.S. Steel has declined. This is because mini mills have replaced large blast furnaces. Unlike blast furnaces, electric furnaces can be turned on and off almost at will. They often operate late at night when electricity rates are very low, because utilities cannot turn their generators off and restart them in time to meet the next day's load. It is more efficient for a mini-mill to use the market than to integrate upstream.
Answer to Question 2
D
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