The Joining of a Firm with Another to Which It

question 39

Multiple Choice

The joining of a firm with another to which it sells an output or from which it buys an input is known as

• A) a conglomerate merger.
• B) a horizontal merger.
• C) a vertical merger.
• D) economies to scale.

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Definitions:

Net Income

Net income is the total earnings of a company after subtracting all expenses, including taxes, costs, and losses, from its total revenue, indicating its profit.

LIFO Method

An inventory valuation method that assumes the last items placed in inventory are the first sold, affecting cost of goods sold and inventory valuations on financial statements.

Costs Decreasing

A situation where the expenses associated with the production or operation of a business are reducing over time.

Lowest Net Income

Refers to the lowest amount of net income recorded by a company over a given period, demonstrating its worst financial performance phase.