The type of merger that increases the degree of concentration the most is a
A)conglomerate merger.
B)horizontal merger.
C)competitive merger.
D)vertical merger.
E)diagonal merger.

Question

Quizplus · Accepted Answer

A horizontal merger involves the combination of firms that are direct competitors in the same industry or market. This type of merger results in the greatest increase in concentration, as it reduces the number of competitors in the industry and increases market power for the merged firm. Conglomerate mergers involve firms that operate in different industries, and vertical mergers involve firms in different stages of the production process, both of which do not necessarily result in increased concentration. Competitive mergers and diagonal mergers are not commonly used terms in the context of mergers and acquisitions.

The Type of Merger That Increases the Degree of Concentration