When a Proposed Merger Between Two Companies Is Reviewed by the Government

question 15

Multiple Choice

When a proposed merger between two companies is reviewed by the government, the relevant market is defined by

• A)whether or not there are close substitutes for the products of the two firms.
• B)how elastic the demand is for each firm's product.
• C)counting the number of firms that produce the same product.
• D)how much advertising is done in the industry.

---

Definitions:

Monopolistic Competition

A market structure in which many companies sell products or services that are similar but not identical, allowing for some degree of market power.

Profit-maximizing

The approach by which an organization figures out the best pricing and output quantity for the highest profit.

Product Variety

The assortment of different products or services offered by a company or available in a market.

Monopolistic Competition

A market structure where many firms sell products that are similar but not identical, allowing for competition but with some level of market power.