A Merger of Several Firms Operating in Different Industries-For Example

question 219

Multiple Choice

A merger of several firms operating in different industries-for example, a trucking company, a fast-food chain, and a brokerage house-is called

• A)an integrated merger.
• B)a conglomerate merger.
• C)a vertical merger.
• D)a horizontal merger.

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Definitions:

Market Failure

A scenario in which the distribution of goods and services through a free market fails to be efficient, frequently resulting in a decrease in net social welfare.

Negative Externalities

Costs experienced by someone who is not directly involved in the production or consumption of a good or service.

Positive Externalities

Benefits experienced by third parties or society at large as a result of an economic activity, without the third party incurring any cost.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning no one can be prevented from using them and one person's use does not reduce availability to others.