Use a long-run average cost curve graph to illustrate how diseconomies of scale would not make it beneficial for two companies to go through with a merger
What will be an ideal response?
Assume the two companies are on ATC1. If they merge, they would move to ATC2 and be on the section of the long-run average cost curve that exhibits diseconomies of scale.
You might also like to view...
Is there one optimal environmental standard for the entire world? If not, how might using trade barriers to enforce country-specific environmental standards reduce overall well being?
What will be an ideal response?
The economy's self-correcting mechanism ensures that neither recessionary nor inflationary gaps will be eliminated eventually
a. True b. False Indicate whether the statement is true or false
If the amount of money in circulation is $50 billion and the nominal GDP is $200 billion, the velocity of money is
a. 0.25 b. 0.75. c. 2. d. 4.
If a firm is experiencing _____________________, then as the quantity of output rises, the average cost of production rises.
a. decreasing returns to scale b. consent returns to scale c. economies of scale d. increasing returns to scale