ATamp;T Argued That the Merger with T-Mobile Should Be Approved

question 31

Multiple Choice

ATamp;T argued that the merger with T-Mobile should be approved by the Justice Department because

• A) It will result in higher prices for consumers.
• B) There are many wireless providers available for consumer.
• C) ATamp;T will gain additional wireless towers from T-Mobile.
• D) The merger will lead to efficiencies because a larger firm can enjoy economies of scale and can keep prices low.

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Definitions:

Fixed Manufacturing Overhead

The portion of manufacturing overhead costs that remains constant regardless of the level of production, such as salaries of supervisors and rent of the factory.

Outside Supplier

An external company or individual that provides goods or services to another company.

Contribution Margin

The amount by which sales revenue exceeds variable costs, indicating how much revenue contributes towards covering fixed costs and generating profit.

Outside Supplier

A third-party company or entity that provides products or services to another company, often used when in-house production or provision is not feasible.