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A horizontal merger is one in which the merging firms

 A horizontal merger is one in which the merging firms

a.are about the same size

b.produce the same good in the same industry

c.will control greater than 50 percent of the market

d.have never directly competed in the past

e.will double the concentration ratio in the industry

82.              The quickest way for aggressive oligopolists to expand production capacity and market
                            power is to

a.erect barriers to entry

b.cut price to sell more

c.raise price to increase profit and apply the profit to research and development

d.merge with a competitor

e.conduct surveys to price discriminate more effectively

83.              Recalling some historical detail of the chapter, the rapid growth of Boeing
                            was primarily due to

a.competitive pricing policies

b.strong advertising campaigns

c.a horizontal merger with McDonnell Douglas

d.a vertical merger with McDonnell Douglas

e.a conglomerate merger with McDonnell Douglas

84.              Concerning the number of horizontal, vertical, and conglomerate mergers in the United
                            States over the period 1890 to 1990, data show that

a.more mergers occurred during the first half of the century

b.there have been more vertical mergers than combined horizontal and conglomerate

c.with a few exceptions, more mergers occurred each year since 1960 than in each of
the years from 1890 to 1959

d.the number of mergers has decreased but the value of the assets involved in mergers
have increased

e.the number of mergers has increased but the value of the assets involved in mergers
have decreased

85.              The concentration ratio for an industry can be increased almost overnight by

a.collusion among the leading four firms

b.the creation of a cartel

c.a conglomerate merger

d.a vertical merger

e.a horizontal merger

86.              Recall some historical facts from the chapter: Which of the following firms grew
                            primarily through vertical mergers?

a.Exxon

b.American Can

c.General Electric

d.Anheuser-Busch

e.American Tobacco

87.              A merger between two firms that have a supplier-purchaser relationship is

a.horizontal

b.vertical

c.conglomerate

d.illegal

e.a cartel

88.              A merger between a shoelace company and a soup company might be undertaken to

a.eliminate a potential competitor

b.enhance a supplier-purchaser relationship

c.diversify assets and production

d.raise the Herfindahl-Hirschman Index in the shoelace industry

e.raise the concentration ratio in the soup industry

89.              Suppose you were a consultant to General Motors and were concerned with the fact that
                            although demand is great today, GM may do poorly in the future because competition
                            from foreign producers is growing and there is no indication it will stop. What would be a
                            wise strategy now for you to address this concern? Advise GM that it should

a.seek a conglomerate merger with some other firm or group of firms

b.build larger plant capacity to increase your market share

c.create more brands (car models) in order to price discriminate

d.cut price to establish brand loyalty

e.seek a vertical merger with some other firm or group of firms

90.              The text uses many examples to illustrate ideas. In the analysis of mergers, it mentioned
                            that R. J. Reynolds merged with all of the following firms except

a.Nabisco

b.Coca-Cola

c.Kraft

d.Del Monte

e.Hawaiian Punch

Dec 12 2019 View more View Less

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