If the Average Cost Per Unit Decreases When a Horizontal

question 177

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:

MMPI

The Minnesota Multiphasic Personality Inventory, a standardized psychometric test of adult personality and psychopathology.

Demand Characteristics

Subtle cues or signals in an experiment that communicate to participants how they are expected to behave or respond.

Overconfidence Effect

A cognitive bias where an individual's subjective confidence in their judgments is greater than the objective accuracy of those judgments.

Social Desirability Bias

The tendency of respondents to answer questions in a manner that will be viewed favorably by others, often skewing the results of surveys and studies.