A Merger Is Unlikely to Be Approved If

question 7

Multiple Choice

A merger is unlikely to be approved if

• A)there are fewer than 6 firms in a market.
• B)it prevents or substantially lessens competition.
• C)the good produced in the market has been deemed a necessity.
• D)the industry is government regulated.
• E)the merged firms economic profit increases.

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Definitions:

Profit Maximization

The process by which a company determines the price and output level that generates the maximum profit.

Production Function

A formula that specifies the output of a firm, an industry, or an entire economy for all combinations of inputs.

Cost Per Unit

The cost incurred in the production of one unit of a product, including material, labor, and overhead costs.

Marginal Product

The extra output generated by increasing the use of a variable input by one unit, while keeping all other inputs unchanged.