Horizontal Merger Occurs When

question 142

Multiple Choice

Horizontal merger occurs when

• A) two firms merge where one had sold its output to the other as an input.
• B) the merger moves the combined firm onto the horizontal portion of its long-run average cost curve.
• C) two firms merge where each is about the same size.
• D) two firms producing a similar product merge.

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Definitions:

Nonrenewable Resource

A nonrenewable resource is a natural substance that cannot be replenished with the speed at which it is consumed, such as fossil fuels, minerals, and certain metals.

Profit-Maximizing

A strategy or point where a firm achieves maximum profit with the given resources and market conditions.

Extraction Companies

Firms that specialize in the removal of natural resources from the Earth, such as oil, natural gas, metals, or minerals.

Flow of Profits

The movement of profits within an economic system, especially as it pertains to how profits are generated, maintained, and distributed among various entities.