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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Suppose the figure shown represents the production possibilities frontier for Country A. Which of the following combinations of goods could Country A consume in the absence of trade?
A. (15 airplanes, 15 trucks)
B. (10 airplanes, 25 trucks)
C. (10 airplanes, 30 trucks)
D. (5 airplanes, 30 trucks)
Which of the following economic forces promotes profitability in the long run?
A. A large number of complementary products B. Existence of strong barriers to entry. C. A large number of close substitute products. D. Both a and b E. All of the above
The process of asset transformation refers to the conversion of
A) safer assets into risky assets. B) safer assets into safer liabilities. C) risky assets into safer assets. D) risky assets into risky liabilities.
A price-setting firm prefers to operate in the inelastic portion of its demand curve because total revenue increases when price is increased
Indicate whether the statement is true or false