A merger wave can be set off
A)by government restrictions that prevent firms from reaching their minimum efficient scale
B)if the federal government raises corporate income taxes.
C)if the federal government lowers corporate income taxes
D)if minimum efficient scale falls
E)by some change in a market,such as a shift in market demand.

Question

Quizplus · Accepted Answer

A merger wave can be set off by some change in a market, such as a shift in market demand. This can create opportunities for firms to merge in order to increase market power and achieve greater efficiency. Government restrictions or changes in corporate income taxes may affect the profitability of firms, but they are not the primary drivers of a merger wave. The minimum efficient scale may also affect the profitability of firms, but it is not a direct cause of a merger wave.

A Merger Wave Can Be Set Off