The Purpose of the Horizontal Merger Guidelines Developed by the Department

question 70

True/False

The purpose of the Horizontal Merger Guidelines developed by the Department of Justice and the FTC is to prevent customers from being harmed by the increased market power that might result from a merger of two or more firms.

---

Definitions:

Discretionary Fixed Costs

Those fixed costs that arise from annual decisions by management to spend on certain fixed cost items, such as advertising and research.

Committed Fixed Costs

Long-term fixed costs that cannot be easily altered in the short term, such as lease payments or insurance contracts.

Volume

The quantity or amount of something, often used in context with production, sales, or trading activities.

Mixed Cost

Expenses that have both variable and fixed components, varying with the level of production or sales to some degree.