The merger of two companies in the same industry that make products required at different stages of the production cycle is called:
A)economies of scope.
B)vertical integration.
C)economies of scale.
D)horizontal integration.
E)efficiency gains.

Question

Quizplus · Accepted Answer

Vertical integration refers to the merger or acquisition of companies that operate at different levels of the supply chain. In this case, the two companies make products required at different stages of the production cycle, indicating vertical integration. Economies of scope and economies of scale refer to different cost-saving strategies, and horizontal integration refers to the merger or acquisition of companies that operate in the same industry and at the same level of the supply chain. Efficiency gains is a general term that can refer to any improvements made in the production process, which may or may not be related to a merger or acquisition.

The Merger of Two Companies in the Same Industry That