Morgan and Stanley Are the Owners of the Two Largest

question 15

Multiple Choice

Morgan and Stanley are the owners of the two largest nail manufacturing businesses in Western Australia.Morgan and Stanley decide to merge to form a single business to take advantage of the economies of scale.In which of the following scenarios is the merger least likely to be objected to by the ACCC?

• A)The merged business will be able to sustain significantly reduced prices that undercut smaller businesses for at least a year.
• B)The merged business will have a 65% market share; more than triple the market share of its nearest competitor.
• C)The merger will lead to an overall drop in the price of nails for consumers.
• D)The merger will result in substantial job losses for the employees of both companies.

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Definitions:

Economic Security

The condition of having stable income or other resources to support a standard of living now and in the foreseeable future.

GNI

Gross National Income, the total domestic and foreign output claimed by residents of a country, including wages, salaries, and investment income, less equivalent payments to non-residents.

United States

A North American nation, renowned for its considerable global impact on economic, political, and cultural affairs.

Developing Countries

Nations with lower levels of industrialization, underdeveloped economic infrastructure, and lower living standards.