A horizontal merger between two firms occurs when
A) the goods produced by the merging firms are not related
B) one firm produces goods while the other produces services
C) one firm is a domestic firm and the other is a foreign firm
D) the firms were in a buyer-seller relationship before the merger
E) the merging firms produce identical or close substitute goods

Question

Quizplus · Accepted Answer

A horizontal merger involves companies that operate in the same industry and produce similar products or services, hence option E is correct as it describes firms producing identical or close substitute goods.

A Horizontal Merger Between Two Firms Occurs When