Which of the following is a benefit that firms should expect to gain from the use of horizontal integration?
A) Reduced risk of coming into conflict with the FTC
B) Better realization of economies of scale
C) Greater control over the entire supply chain
D) Reduced risk of holdup
E) Reduced need for investment in core activities

Question

Quizplus · Accepted Answer

Horizontal integration allows firms to combine their resources and operations with other firms in the same industry, leading to increased economies of scale. This means that firms can produce more output with the same amount of inputs, leading to lower costs and potentially higher profits. While the other options may also be benefits of horizontal integration to some extent, B is the most directly linked to the concept.

Which of the Following Is a Benefit That Firms Should