Which of the Following Type of Merger Is Most Likely

question 66

Multiple Choice

Which of the following type of merger is most likely to lead to diversification benefits?

• A) Horizontal merger
• B) Vertical merger
• C) Tax free exchange
• D) Conglomerate

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Definitions:

Bundle

A combination or collection of goods or services that is considered as a single unit by consumers or businesses.

Cobb-Douglas Utility

A specific form of utility function used in economics to represent preferences of consumers, characterized by a functional form that is a particular type of product of goods' amounts raised to various powers.

Compensating Variation

An economic concept referring to the amount of money one would need to attain the same level of utility after a price change.

Equivalent Variation

A measure in economics that calculates the change in wealth needed to reach utility before a price change, preserving consumer satisfaction levels.