Horizontal Merger Occurs When

question 142

Multiple Choice

Horizontal merger occurs when

• A) two firms merge where one had sold its output to the other as an input.
• B) the merger moves the combined firm onto the horizontal portion of its long-run average cost curve.
• C) two firms merge where each is about the same size.
• D) two firms producing a similar product merge.

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Definitions:

Securities

Equities and debts that reflect a stake in publicly available corporate entities, or an indebtedness to a public or private organization, alongside options that confer rights to ownership.

Real Rate of Return

The annual percentage of profit earned on an investment, adjusted for inflation, representing the purchasing power gained.

Nominal Rate

The advertised or stated interest rate on a loan or bond, not adjusted for inflation.

Inflation Rate

The tempo at which the price level for standard goods and services heightens, thereby reducing the purchasing effectiveness.