How Does Horizontal Integration Within an Industry Affect the Surviving

question 42

Multiple Choice

How does horizontal integration within an industry affect the surviving firms?

• A) By increasing the threat the surviving firms will face from new entrants
• B) By strengthening the rivalry among existing firms
• C) By requiring the surviving firms to shift their focus from non-price to price competition
• D) By strengthening the bargaining power of the surviving firms vis-à-vis suppliers and buyers

---

Definitions:

Diversifiable Risks

Risks that can be reduced or eliminated from a portfolio through diversification.

Unique Risks

Unique risks refer to the specific and individual risks that affect only a particular company, security, or investment sector, as opposed to risks that affect the entire market.

Unsystematic Risk

The risk associated with a specific company or industry, which can be reduced through diversification.

Asset-specific Risk

Refers to the risk affecting an investment's value that is associated with the particular assets the investment owns, distinct from marketwide risks.