The Justice Department refused to approve a merger between office supplier Staples and office supplier Office Depot,a merger that would have given the two 70% of the office supply store market.Which of the following would be a valid reason for denying the approval for the merger?

Question

The Justice Department refused to approve a merger between office supplier Staples and office supplier Office Depot,a merger that would have given the two 70% of the office supply store market.Which of the following would be a valid reason for denying the approval for the merger?​

Quizplus · Accepted Answer

The Justice Department likely refused the merger because it would significantly reduce competition in the market, as indicated by the fact that no new office suppliers would be able to enter the market. This could lead to higher prices or lower quality of service for consumers. Vertical mergers are not per se violations; it's the impact on market competition that matters, and a 50% market share alone isn't a definitive reason for denial without considering market dynamics and competition.

The Justice Department Refused to Approve a Merger Between Office