The Main Reason That IBM Is Involved in Multiple Alliances

question 110

Multiple Choice

The main reason that IBM is involved in multiple alliances is to

• A) consolidate a fragmented industry and thus gain market power.
• B) leverage its core competencies and grow and improve its performance.
• C) capture the intangible resources of competitors in order to gain a competitive advantage against them in the future.
• D) avoid government anti-trust regulations which would apply if IBM were to acquire the firms it allies itself with.

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Definitions:

Deadweight Loss

The decrease in economic productivity that happens when a good or service does not reach, or cannot reach, its equilibrium point.

Consumer Surplus

The difference between the maximum amount consumers are willing to pay for a good or service and the actual amount they do pay.

Tax Revenue

The wealth accumulated by governments through the process of taxation.

Consumer Surplus

Consumer surplus is the difference between the total amount consumers are willing and able to pay for a good or service and the total amount they actually pay.