A merger between a paper producer and a book publisher is an example of?
Correct answer: D. a vertical merger
- A. a conglomerate merger.
- B. a horizontal merger
- C. a complementary products merger.
- D. a vertical merger
Explanation
A paper producer supplies an important input to a book publisher, so the firms operate at successive stages of production and distribution. Their combination is therefore a vertical merger, not a horizontal merger between direct competitors.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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