A horizontal merger
a. combines similar firms that serve separate markets.
b. combines firms that produce similar products.
c. enables a company to control each stage of the production process: from raw materials to the final marketing of the product.
d. enables similar firms to form a cartel.
b. combines firms that produce similar products.
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External benefits cause the market to:
a. underallocate resources. b. be more efficient. c. set excessively high prices. d. have persistent shortages.
A government currently uses price controls to hold down the price of zinc, an exhaustible resource. If price controls are removed,
A. production of zinc will probably fall. B. zinc mines with high marginal cost of production will probably stop producing. C. consumers of zinc will probably want substitutes for zinc. D. income will probably be redistributed from zinc producers to zinc consumers.
Scarcity exists when:
A) a choice must be made among two or more alternatives. B) we face the notion of "all other things unchanged." C) countries and people find themselves facing poverty. D) the notions of normative economics come into play.
Which of the following statements is not consistent with the quantity theory of money?
A. The velocity of money can be affected by how frequently workers are paid. B. Velocity can change with changes in the interest rate. C. The velocity of money can be affected by the development of new financial instruments, such as interest-bearing checking accounts. D. The velocity of money can be affected by the manner in which the banking system clears transactions between banks.