Which of the Following Statements Regarding Monopoly Mergers Is FALSE

question 20

Multiple Choice

Which of the following statements regarding monopoly mergers is FALSE?

• A)It is often argued that merging with or acquiring a major rival enables a firm to substantially reduce competition within the industry and thereby increase profits.
• B)Financial researchers have found that the share prices of other firms in the same industry did not significantly increase following the announcement of a merger within the industry.
• C)While only the merging company benefits when competition is reduced,all companies in an industry pay the associated costs.
• D)Society,as a whole,bears the cost of monopoly strategies,so most countries have antitrust laws that limit such activity.

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Definitions:

Utility Function

A mathematical representation of how different quantities of goods or services translate into levels of happiness or satisfaction for an individual or society.

Utility Function

A mathematical representation that assigns a value to every possible choice to indicate the level of satisfaction or utility that choice provides to a consumer.

Demand

The quantity of a good or service that consumers are willing and able to purchase at a given price over a specified period of time.

Income

Remuneration obtained regularly through employment or investment activities.