Which of the following is correct?
A) Vertical mergers are more likely to be acceptable under antitrust laws than are horizontal mergers.
B) A vertical merger entails the merging of two or more competing firms.
C) Horizontal mergers are more likely to be acceptable under antitrust laws than are vertical mergers.
D) Conglomerate mergers occur when two or more firms at various stages in a good's production are combined.

Question

Quizplus · Accepted Answer

Vertical mergers involve firms at different stages of the production process, such as a manufacturer and a supplier. They are generally considered to be less harmful to competition than horizontal mergers, which involve competitors in the same market. Therefore, antitrust laws are more likely to allow vertical mergers to proceed.

Option B is incorrect because a vertical merger involves firms at different stages of the production process, not competing firms.

Option C is incorrect because horizontal mergers are generally more closely scrutinized by antitrust laws due to their potential to reduce competition.

Option D is incorrect because conglomerate mergers involve firms in unrelated industries, not firms at various stages in a good's production.

Which of the Following Is Correct