Refer to Horizontal Merger. If area F + G is larger than area E, we can conclude that the horizontal merger
The following questions refer to the accompanying diagram, which shows the effects of a horizontal merger. Before the merger, the firm behaves competitively producing Q0 and charging P0. The merger lowers the firm's marginal cost and gives the firm enough market power to switch to the monopoly equilibrium.
a. will reduce economic efficiency.
b. causes both consumers' and producer's surplus to rise.
c. will not increase the firm's profit and thus will not be undertaken.
d. creates an increase in social gain.
d. creates an increase in social gain.
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According to the Application, one factor which was responsible for roughly one-third of hybrid vehicles purchased in 2007 was an increase in the price of gasoline
The increase in sales due to higher gasoline prices describes the economic concept of A) marginal thinking. B) rational self interest. C) using assumptions to simplify. D) ceteris paribus.
The change in a firm's total cost from producing one more unit of a good or service is the firm's
A) average cost of production. B) explicit cost of production. C) marginal cost of production. D) implicit cost of production.
Most collective bargaining situations lead to strikes
a. True b. False Indicate whether the statement is true or false
Exhibit 15-3 Balance sheet of Tucker National Bank Assets Liabilities Required reserves$ 20,000 Checkable deposits$100,000 Excess reserves0 Loans 80,000 Total$100,000 Total$100,000 Assume all banks in the system started with balance sheets as shown in Exhibit 15-3 and the Fed made a $100,000 open market purchase. The result would be a(n):
A. $500,000 expansion of the money supply. B. $100,000 expansion of the money supply. C. $20,000 contraction of the money supply. D. infinite expansion of the money supply.