Which of the Following Is the Most Likely Reason Firm

question 72

Multiple Choice

Which of the following is the most likely reason Firm A would decide to forgo an acquisition and pursue an alliance instead?

• A)​It wants learning opportunities without long-term commitment.
• B)​It wants greater control of day-to-day operations.
• C) ​It wishes to engage in a long-term enduring relationship.
• D) ​It wishes to consolidate market power, reduce risks, and leverage economies of scope.

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Definitions:

Industry Exit

The process of firms leaving a market or ceasing production in a particular industry, often due to unfavourable market conditions, regulatory changes, or strategic re-alignments.

Markup

The amount added to the cost price of goods to cover overhead and profit; the difference between the cost of a product and its selling price.

Marginal Cost

Marginal cost is the change in the total cost that arises when the quantity produced changes by one unit.

Profit-Maximizing

A strategy where a business aims to achieve the highest possible profit from its operations.