If the Average Cost Per Unit Decreases When a Horizontal

question 14

Multiple Choice

If the average cost per unit decreases when a horizontal merger occurs then the combined firm is benefiting from synergy arising from:

• A) A reduction in net working capital.
• B) A beachhead.
• C) Economies of scale.
• D) Market power.
• E) Revenue enhancement.

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Definitions:

Slope

The slope refers to the steepness or incline of a line on a graph, representing the rate of change between variables.

Linear Regression Equation

A mathematical equation that describes the linear relationship between two or more variables, typically one dependent and one or more independent variables.

Slope

The rate of change in one variable relative to a change in another variable, often used in the context of linear regression.

Intercept

The value of the dependent variable when all independent variables are zero in a regression model.