A manufacturing firm purchases a retail chain that sells its products is an example of ____.
A)a horizontal merger
B)a vertical merger
C)a conglomerate merger
D)a competition reduction merger

Question

Quizplus · Accepted Answer

A vertical merger is when a company acquires another company that is part of its supply chain or distribution network. In this case, the manufacturing firm is purchasing a retail chain that sells its products, which would be considered a vertical merger. A horizontal merger would involve the manufacturing firm purchasing another company in the same industry or market, a conglomerate merger would involve the manufacturing firm purchasing a company in an unrelated industry, and a competition reduction merger would involve the manufacturing firm purchasing a competitor in order to reduce competition.

A Manufacturing Firm Purchases a Retail Chain That Sells Its