US Antitrust Regulators May Approve a Horizontal Transaction Even If

question 114

True/False

U.S. antitrust regulators may approve a horizontal transaction even if it results in the combined firms having substantial market share if it can be shown that significant cost efficiencies would result.

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Definitions:

Productive Efficiency

A situation in which an economy or entity is operating at maximum capacity, producing goods or services at the lowest possible cost.

Long-Run Equilibrium

A state in economics where all factors of production and outputs in an industry or market adjust fully to any changes, leading to a stable condition where no participant has an incentive to change behavior.

Spillovers

Economic events in one context that have effects on a third party or in a different context, often external to the initial economic activity.

Marginal Cost

The additional cost incurred by producing one extra unit of a good or service.