Which of the following is NOT a common reason for a merger?
Correct answer: A. To increase competition
- A. To increase competition
- B. To reduce uncertainty
- C. To achieve faster growth
- D. To achieve economies of scale
Explanation
Firms generally merge to reduce uncertainty, grow faster, or obtain economies of scale, while increasing competition is not a normal merger objective. In fact, mergers may reduce competition by combining rival firms.
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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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