_____mergers can lead to increased market power and, as a result, _____the total surplus in the market.
A)Horizontal; increase
B)Vertical; increase
C)Horizontal; decrease
D)Vertical; decrease

Question

Quizplus · Accepted Answer

Horizontal mergers can lead to increased market power for the merged entity, which can then reduce competition. This reduction in competition can lead to higher prices and lower quantities of goods or services being produced and sold, thereby decreasing the total surplus in the market.

_____Mergers Can Lead to Increased Market Power And, as a Result