An allowable defence for a merger according to Canada's Competition Bureau is that
A)merged and therefore bigger firms are better placed to compete globally.
B)larger firms are easier to regulate.
C)the gains in efficiency resulting from the merger more than offset any reductions in competition.
D)merging firms find it easier to decide how they will share the market.
E)merging firms are more profitable because they no longer have to compete with one another.

Question

Quizplus · Accepted Answer

The Competition Bureau allows a merger if the efficiency gains from the merger outweigh the potential harm to competition. This means that if the merged firm can provide goods or services at a lower cost or innovate more than the individual firms, it could benefit consumers. This defence is not based on whether the resulting firm is better positioned to compete globally, easier to regulate, has simplified market-sharing agreements, or is more profitable.

An Allowable Defence for a Merger According to Canada's Competition