Reduced Competition Through Merging of Companies Will Raise Social Welfare

question 210

Multiple Choice

Reduced competition through merging of companies will raise social welfare

• A)if the social cost from the synergies exceeds the benefit of increased market power.
• B)if the benefit from the synergies exceeds the social cost of increased market power.
• C)always.
• D)never.

---

Definitions:

Negative Externalities

Costs experienced by a third party not involved in a transaction, arising from production or consumption of goods and services.

Majority Voting

A decision-making process where the option that receives more than half of the votes cast by eligible voters is chosen.

Economic Efficiency

The optimal distribution of resources to maximize productivity and fulfill consumer preferences with minimal waste.

Paradox Of Voting

The concept that in a large election, the probability of one vote being decisive is so small that rational voters have no incentive to vote.