ECONOMICS (CBSE/UGC NET)

ECONOMICS

COMPETITION AND MARKET STRUCTURES

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
A merger that joins companies that produce very similar products is called ____
A
conglomerate.
B
vertical merger.
C
horizontal merger.
D
corporation.
Explanation: 

Detailed explanation-1: -A horizontal merger occurs between companies operating in the same industry. The merger is typically part of consolidation between two or more competitors offering the same products or services.

Detailed explanation-2: -Horizontal mergers occur when companies of the same industry merge. They often result in a way to eliminate competition by creating one powerful company instead of two competitors. Horizontal mergers can greatly increase revenues, as the combined companies have access to a greater variety of products or services.

Detailed explanation-3: -Horizontal Versus Vertical Mergers These competitors operate within a similar industry or have like products. A completed horizontal merger leaves the market with one less competitor and a larger combined firm. A vertical merger is a combination of firms at different levels of the supply chain.

Detailed explanation-4: -Horizontal Merger A merger occurring between companies in the same industry. Horizontal merger is a business consolidation that occurs between firms who operate in the same space, often as competitors offering the same good or service.

Detailed explanation-5: -Integration of Facebook, Whatsapp, Instagram & Messenger This is one of the best examples of horizontal mergers of present times. All of these were independent social media platforms started by different companies and one after another, over the years, these were integrated into one big social media company.

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