If two firms doing the same thing in the same industry join together, this is known as a ?
Correct answer: B. horizontal merger
- A. vertical merger
- B. horizontal merger
- C. conglomerate merger
- D. hostile takeover
Explanation
A horizontal merger combines firms operating at the same stage of production in the same industry, such as two competing manufacturers. A vertical merger instead joins firms at different stages of the supply chain.
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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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