If two firms in the same industry (but at different stages of the production process) merged,...
If two firms in the same industry (but at different stages of the production process) merged, this would be a(n) __________ merger.
a) vertical
b) conglomerate
c) horizontal
d) antitrust
e) none of the above
Homework Answers
Answer
Option a
vertical merger
If two firms in the same industry (but at different stages of the production process) merged, this would be a vertical merger.
a Conglomerate is a merger of entirely different business.
The horizontal merger is a merger in the same industry at the same level as the production process.
antitrust laws stop mergers which reduces competition in the market.
Add Answer to:
If two firms in the same industry (but at different stages of
the production process) merged,...
48) 48) A merger between firms that are in the same industry is called a A) vertical merger C) ho...
48) 48) A merger between firms that are in the same industry is called a A) vertical merger C) horizontal merger. B) conglomerate merger D) none of the above. 49) 49) In oligopoly, any action by one firm to change price, output, or quality causes A) no reaction from the other firms. B) a reaction by other firms. C) loss of market share by the acting firm D) a profit gain for the other firms. 50) 50) The industry concentration...
1. Alpha company has merged with Beta & Co. Both firms are specialized in manufacturing furniture....
1. Alpha company has merged with Beta & Co. Both firms are specialized in manufacturing furniture. After merger, they have reduced their staff from 44,000 to 39,000. What is the main motive for this merger? 1-Achieving economies of scale 2-Achieving economies of vertical integration 3-Using their complementary resources 4-Having an industry consolidation 5-None of the above 2. A poison pill defense is implemented by 1-Giving stock away 2-Selling firm assets 3-Issuing rights at a cheap price 4-Adding seats to the...
Recently there have been several mergers involving Big Four accounting firms. One such merger involved the...
Recently there have been several mergers involving Big Four accounting firms. One such merger involved the firms of Arthur Young and Ernst & Whinney, who combined to form Ernst & Young. This is an example of a a. syndicate. b. vertical merger. c. conglomerate merger. d. horizontal merger. e. joint venture. Recently, Amazon announced it was purchasing Whole Foods for $13.4 billion. Amazon is an online retailer which sells everything from books to batteries and Whole Foods is a natural...
Suppose that the only two firms in an industry face the market (inverse) demand curve p-...
Suppose that the only two firms in an industry face the market (inverse) demand curve p- 130-Q. Each has constant marginal cost equal to 4 and no fixed costs. Initially the two firms compete as Cournot rivals (Chapter 11) and each produces an output of 42. Why might these firms want to merge to form a monopoly? What reason would antitrust authorities have for opposing the merger? (Hint: Calculate price, profits, and total surplus before and after the merger.) The...
Suppose an industry originally consists of 11 firms (A, B, C, D, E, F, G, H,...
Suppose an industry originally consists of 11 firms (A, B, C, D, E, F, G, H, I, J & K) with the following market shares: Firm(s): A B C D E F G thru K Market Share: 20% 20% 15% 15% 10% 10% 2% each Now suppose Firms D & E merge. How will federal antitrust regulators (the Department of Justice and the Federal Trade Commission) respond? A. Merger will be allowed. B. Merger is unlikely to be challenged. C....
Consider an industry composed of four firms which produce a homogeneous good with inverse demand ...
Consider an industry composed of four firms which produce a homogeneous good with inverse demand P(Y) 100-Y where Y - Notice that this set-up implies the firms compete in quantities. The firms have similar c(y) 20y production costs defined as a) Compute firm profits from the Nash equilibrium. b) Show that a merger between firms one and two is not profitable. c) Suppose that a merger between firms one and two will generate cost synergies s where s is a...
Suppose that the only two firms in an industry face the market (inverse) demand curve p=160-q.Each...
Suppose that the only two firms in an industry face the market (inverse) demand curve p=160-q.Each has constant marginal cost equal to 16 and no fixed costs. Initially the two firms compete as Cournot rivals (Chapter 11) and each produces an output of 48.Why might these firms want to merge to form a monopoly? What reason would antitrust authorities have for opposing the merger? (Hint:Calculate price, profits, and total surplus before and after the merger.)Suppose that each firm has fixed...
Two firms have the same asset beta but different equity betas. The direct cause is likely:...
Two firms have the same asset beta but different equity betas. The direct cause is likely: a. The importance of variable costs varies across these firms b. The firms have different proportions of debt relative to equity b. One firm’s sales are more cyclical than the other c. All of the above d. None of the above
Consider an industry with N identical firms producing a homogeneous product and competing in quantities. The...
Consider an industry with N identical firms producing a homogeneous product and competing in quantities. The demand function is given by Q = α − P and each firm has constant marginal cost c. Two of the firms are planning to merge. If this merger occurs, the industry would then consist of N – 1 identical firms. Would such a merger occur? Comment more generally on the incentives for merger in oligopoly.
When managers in oligopolistic firms make decisions that affect output or price, they must &nb
When managers in oligopolistic firms make decisions that affect output or price, they must (1) A) also be sure they erect barriers to entry to prevent new entrants from affecting their plans. B) anticipate the reactions of their rivals and plan accordingly. C) register with the Antitrust Division of the Department of Justice. D) inform the regulators of their industry about their plans. If Ford Motor Company and General Motors Corporation were to merge, this would represent (1) a vertical...
48) 48) A merger between firms that are in the same industry is called a A) vertical merger C) horizontal merger. B) conglomerate merger D) none of the above. 49) 49) In oligopoly, any action by one firm to change price, output, or quality causes A) no reaction from the other firms. B) a reaction by other firms. C) loss of market share by the acting firm D) a profit gain for the other firms. 50) 50) The industry concentration...
Suppose that the only two firms in an industry face the market (inverse) demand curve p- 130-Q. Each has constant marginal cost equal to 4 and no fixed costs. Initially the two firms compete as Cournot rivals (Chapter 11) and each produces an output of 42. Why might these firms want to merge to form a monopoly? What reason would antitrust authorities have for opposing the merger? (Hint: Calculate price, profits, and total surplus before and after the merger.) The...
Consider an industry composed of four firms which produce a homogeneous good with inverse demand P(Y) 100-Y where Y - Notice that this set-up implies the firms compete in quantities. The firms have similar c(y) 20y production costs defined as a) Compute firm profits from the Nash equilibrium. b) Show that a merger between firms one and two is not profitable. c) Suppose that a merger between firms one and two will generate cost synergies s where s is a...
Most questions answered within 3 hours.
-
A strawberry farmer determines that the average weight of
individual strawberries produced by plants in his...
asked 9 minutes ago -
Chargaff's results yielded a molar ratio of 0.400 for A to G in
avian tubercle bacillus...
asked 2 hours ago -
Which of the following binds ATP/ADP?
a. microfilaments
b. microtubules
c. intermediate filaments
d. microfilaments and...
asked 2 hours ago -
Assume that the situation can be expressed as a linear cost
function. Find the cost function....
asked 4 hours ago -
(Sort ArrayList) Write the following method that sorts an
ArrayList: public static > void sort(ArrayList list)...
asked 4 hours ago -
2) A 9 volt battery is connected to a parallel plate capacitor
with an initial capacitance...
asked 4 hours ago -
Prince Equipment has to decide whether to obtain $1,000,000 of
financing by: (1) selling common stock...
asked 5 hours ago -
The terms electrical and electronic have similar but
different meanings which of the following statement is...
asked 5 hours ago -
You wish to test the claim that the mean GPA of night students
is than 2.5...
asked 5 hours ago -
A soft drink machine outputs a mean of 25 ounces per cup. The
machine's output is...
asked 6 hours ago -
Ross Co., Westerfield, Inc., and Jordan Company announced a new
agreement to market their respective products...
asked 6 hours ago -
What is the distance run by a runner 50m/hr and
60m/hr?
asked 7 hours ago