One Business Partner Wants to Grow the Company Through Acquisition

question 83

Multiple Choice

One business partner wants to grow the company through acquisition of a large competitor while the other partner prefers expanding operations to other states. They agree to buy out two smaller firms in different states, satisfying both individual's preferences. The partners used ________ to address this conflict.

• A)compromise
• B)distributive negotiation
• C)accommodation
• D)avoidance
• E)competition

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Definitions:

Barriers To Entry

Obstacles that make it difficult for new competitors to enter a market.

Scale Economies

Cost advantages that a business can achieve due to expansion in the scale of production, leading to a reduction in average costs.

Patents

Legal documents granting an inventor exclusive rights to manufacture, use, or sell an invention for a certain number of years.

Cournot Model

Oligopoly model in which firms produce a homogeneous good, each firm treats the output of its competitors as fixed, and all firms decide simultaneously how much to produce.