Holey Doughnuts and Clair's Eclairs Want to Merge

question 49

Multiple Choice

Holey Doughnuts and Clair's Eclairs want to merge.Each has 2 percent of the local pastry market.It is most likely that

• A)the Department of Justice would challenge the merger but the Federal Trade Commission would not
• B)the Federal Trade Commission would challenge the merger but the Department of Justice would not
• C)the merger will go unchallenged because it will not tend to reduce competition
• D)the government will successfully challenge the merger because it is a horizontal merger
• E)the government will successfully challenge the merger because it is a vertical merger

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Definitions:

Credit Sales

Sales transactions where the payment is deferred to a future date, typically allowing the buyer to purchase goods or services on credit.

Vice-president

An officer in a company or institution below the president in rank, who can act in place of the president under certain conditions.

Segregation of Duties

An internal control mechanism designed to reduce the risk of error or fraud by dividing responsibilities among different people in an organization.

Cheque Signer

An authorized individual within an organization who has been given the authority to sign checks on behalf of the company.