Vertical merger occurs when
A. the merger moves the combined firm onto the horizontal portion of its long-run average cost curve.
B. two firms producing a similar product merge.
C. two firms merge where each is about the same size.
D. two firms merge where one had sold its output to the other as an input.
Answer: D
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A firm's optimal input proportions may change if
a. input prices change. b. the relative marginal productivities of the inputs change. c. the firm's optimal output level changes. d. All of the above are correct.
The exchange rate is the price of one currency in terms of another
a. True b. False Indicate whether the statement is true or false
In terms of importance, what place does the advent of the euro hold in economic history?
A) It is an important innovation in the evolution of fixed exchange rates. B) It is an interesting experiment from which we can learn lessons. C) It is a bold experiment, affecting hundreds of millions of people in one of the most prosperous economic regions. D) In the grand scheme of things, the euro is less important than the fixed exchange rate scheme devised in Bretton Woods, New Hampshire.
The production possibilities curve shifts outward when
A. there is an increase in resources or technology. B. the economy is producing efficiently. C. we produce more consumption goods over productive investment in equipment. D. the law of increasing additional cost takes hold.