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

Question

Quizplus · Accepted Answer

The Competition Bureau allows a merger if the gains in efficiency from the merger offset any reduction in competition. This means that the merged entity should be able to produce goods or services at a lower cost, which will ultimately benefit consumers through lower prices or improved quality. Therefore, option E is the correct answer.

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