Which of the following statements regarding monopoly mergers is FALSE?
A)It is often argued that merging with or acquiring a major rival enables a firm to substantially reduce competition within the industry and thereby increase profits.
B)Financial researchers have found that the share prices of other firms in the same industry did not significantly increase following the announcement of a merger within the industry.
C)While only the merging company benefits when competition is reduced,all companies in an industry pay the associated costs.
D)Society,as a whole,bears the cost of monopoly strategies,so most countries have antitrust laws that limit such activity.

Question

Quizplus · Accepted Answer

When competition is reduced, it can benefit all companies in the industry by allowing them to increase prices and profits, not just the merging company.

Which of the Following Statements Regarding Monopoly Mergers Is FALSE