A Possible Advantage of a Horizontal Merger for the Economy

question 158

Multiple Choice

A possible advantage of a horizontal merger for the economy is that

• A)the merging firms could avoid losses.
• B)the merged firm might reap economies of scale which could translate into lower prices.
• C)the degree of competition in the industry will be intensified.
• D)the government stands to collect more corporate income tax revenue.

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Definitions:

Organizational Responses

The reactions or strategies adopted by a business or institution to address internal challenges or external pressures.

Defender

In a business context, a defender is a type of strategy or stance where an organization focuses on defending its market position by improving operational efficiency and product quality, rather than seeking new markets.

Prospector

In a business context, this term refers to companies that focus on innovation, seeking out new markets and opportunities, and being among the first to bring new products or services to market.

Operational Planning

The process of developing detailed, short-term plans that guide an organization's resources towards achieving strategic objectives.