A Possible Advantage of a Horizontal Merger for the Economy

question 158

Multiple Choice

A possible advantage of a horizontal merger for the economy is that

• A)the merging firms could avoid losses.
• B)the merged firm might reap economies of scale which could translate into lower prices.
• C)the degree of competition in the industry will be intensified.
• D)the government stands to collect more corporate income tax revenue.

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Definitions:

Cost Per Equivalent Unit

A calculation used in process costing that represents the cost assigned to both completed units and partially completed units during a specific period.

Materials Cost

The expense incurred by a company for the raw materials used in the production of its goods.

Weighted-Average Method

An inventory valuation method that calculates the cost of goods sold and ending inventory based on the average cost of all items.

Ending Work

The work or tasks that are in the process of being completed at the end of a given period, often used in the context of project management or production.