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Which one of the following statements about horizontal mergers is not correct? During an economic recession,...

Which one of the following statements about horizontal mergers is not correct?

  1. During an economic recession, horizontal mergers cannot offer valuable cost efficiency improvements
  2. Horizontal mergers allow firms to exploit economies of scope
  3. When the firm is growing rapidly, horizontal mergers provide the means for exploiting growth while achieving economies of scale
  4. Horizonal mergers provide firms with a competitive advantage which other competitors may find difficult to replicate
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Answer #1

B. Horizontal mergers allow firms to exploit economies of scope

This is not true in case of a horizontal merger because such a merger is exhibited within organization in the same industry.

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