When the Net Income of the Combined Companies After a Merger

question 16

Multiple Choice

When the net income of the combined companies after a merger exceeds the sum of the net incomes prior to the merger, ____ is said to exist.

• A)goodwill
• B)synergy
• C)leverage
• D)greenmail

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Definitions:

Long Run

A period in economics where all resources and inputs can be fully adjusted or changed, contrasting with the short run where some are fixed.

Marginal Revenue

The revenue uplift experienced by selling an additional unit of a product or service.

Marginal Cost

The additional expense incurred from producing one more unit of a good or service, which is crucial for decision-making in production and pricing.

Tennessee Valley Authority

a U.S. government agency established in 1933 to address a wide range of environmental, economic, and technological issues in the Tennessee Valley region.