An economic gain is derived from mergers when two firms are worth more combined than separate.

Question

Quizplus · Accepted Answer

When two firms merge, they can benefit from economies of scale, increased market power, and cost savings. These factors can result in the combined company being worth more than the sum of its individual parts, leading to an economic gain. However, mergers can also lead to negative consequences such as reduced competition and higher prices for consumers.

An Economic Gain Is Derived from Mergers When Two Firms