A Consolidation

question 41

Multiple Choice

A consolidation:

• A) has precisely the same result as a merger.
• B) is the most typical form of business combination used today.
• C) is always illegal (in contrast to mergers,which are legal under state law).
• D) requires the assent of the board of directors and shareholders of each corporation.

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Definitions:

Comparative Advantage

A principle that states that a party should specialize in producing goods for which it has the lowest opportunity cost, leading to increased economic efficiency.

Opportunity Cost

The sacrifice of potential gains from other possibilities when a specific alternative is opted for.

Absolute Advantage

A condition in which a country, individual, or firm can produce a good or service at a lower cost per unit than competitors.

Specialization

Focusing on a narrow area of expertise or production, often leading to increased efficiency and productivity in that area.