Distinguish between a horizontal merger and a vertical merger
What will be an ideal response?
A horizontal merger is a merger between two firms selling a similar product. A vertical merger is a merger between two firms when one firm purchases the output of the other firm as an input.
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If people expect the price of packaged coffee to rise next week, coffee demand will:
a. decrease now. b. increase now. c. stay the same now and increase next week. d. stay the same now and decrease next week. e. stay the same now and next week.
The argument that import restrictions save jobs and promote prosperity fails to recognize that:
a. there are no secondary effects of import restrictions. b. import restrictions will lower prices in the protected industries. c. import restrictions cannot create jobs in any industries. d. U.S. imports provide people in other countries with the dollars power required for the purchase of U.S. exports.
A good is an inferior good if the consumer buys less of it when
a. his income rises. b. the price of the good rises. c. the price of a substitute good falls. d. his income falls.
Suppose that the equilibrium price of T-shirts increases and the equilibrium quantity of T-shirts decreases. This is best explained by:
A. an increase in the demand for T-shirts. B. an increase in the supply of T-shirts. C. a decrease in the demand for T-shirts. D. a decrease in the supply of T-shirts.