Synergy Exists When

question 9

Multiple Choice

Synergy exists when:

• A)two units are combined into one
• B)two units create value by utilising market power in their respective industries
• C)firms utilise constrained related diversification to build an attractive portfolio of businesses
• D)the value created by business units working together exceeds the value the units create when working independently

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Definitions:

Monopoly Supply Curve

A theoretical concept indicating that a monopoly does not have a traditional supply curve because its output decision depends on the demand it faces and its cost structure.

Average Variable Costs

The total variable costs of production divided by the quantity of output produced.

Demand Changes

Variations in the desire or need for a product or service, influenced by factors like price, income levels, and consumer preferences.

Price

The value that must be exchanged to obtain a good or service.