Under the Merger Guidelines a Major Reason to Approve a Merger

question 184

Multiple Choice

Under the merger guidelines a major reason to approve a merger is:

• A) the demonstration that the merger will increase profits
• B) the demonstration that the merger will reduce profits
• C) the demonstration that the merger will create jobs
• D) the demonstration that the merger will reduce market share
• E) none of the other choices are correct

---

Definitions:

Minimum Efficient Scale

Minimum efficient scale is the smallest scale of production at which a firm can achieve long-term average costs that are as low as possible.

Output Level

The amount of products or services that a business or sector generates during a specific period.

Plant Sizes

Refers to the scale or capacity of manufacturing or production facilities, impacting output, efficiency, and economies of scale.

Natural Monopoly

An industry in which economies of scale are so great that a single firm can produce the industry’s product at a lower average total cost than would be possible if more than one firm produced the product.