Tangypop and Fizzmania, two giant soft drink companies in Brazil, join together to form a new company out of the two previously independent firms. They take this step to reduce competition, leverage economies of scale, and increase their size and market power within the soft drink industry. This association is most likely an example of a _____.

Question

Quizplus · Accepted Answer

A horizontal merger occurs when two companies in the same industry and at the same stage of production, like Tangypop and Fizzmania, combine to reduce competition and increase market power.

Tangypop and Fizzmania, Two Giant Soft Drink Companies in Brazil