A Primary Reason for a Firm to Pursue an Acquisition

question 92

Multiple Choice

A primary reason for a firm to pursue an acquisition is to:

• A) avoid increased government regulation.
• B) achieve greater market power.
• C) exit a hyper-competitive market.
• D) achieve greater financial returns in the short run.

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Definitions:

Quota Rent

The difference between the demand price and the supply price at the quota limit; this difference, the earnings that accrue to the license-holder, is equal to the market price of the license when the license is traded.

Domestic Demand

The total demand for goods and services within a country, including both consumer and governmental purchases.

Calculators

Electronic devices or software used to perform calculations, ranging from simple arithmetic to complex mathematical operations.

World Trade Organization

An international body that deals with the rules of trade between nations, aiming to ensure that trade flows as smoothly, predictably, and freely as possible.