One of the potential problems associated with acquisitions is that the additional costs required to manage the larger firm will exceed the benefits of economies of scale and additional market power.

Question

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Acquisitions can involve high costs related to the integration of the two firms and the management of the combined entity. If these costs exceed the benefits of economies of scale and increased market power, the acquisition may not be successful in generating long-term value for the acquiring company. This is a well-known risk associated with mergers and acquisitions.

One of the Potential Problems Associated with Acquisitions Is That