It is generally accepted that horizontal mergers (between competitors) decrease competition. Imagine a three firm industry in which the competitors' market shares are as follows:
$\begin{array}{ll}
\text { A } & 26 \% \
\text { B } & 20 \
\text { C } & 54 \%
\end{array}$ Is it possible that a merger between A and B would increase competition in the industry to the benefit of customers?

Question

It is generally accepted that horizontal mergers (between competitors) decrease competition. Imagine a three firm industry in which the competitors' market shares are as follows:
 $\begin{array}{ll}
\text { A } & 26 \% \
\text { B } & 20 \
\text { C } & 54 \%
\end{array}$ Is it possible that a merger between A and B would increase competition in the industry to the benefit of customers?

Quizplus · Accepted Answer

The Answer of It is generally accepted that horizontal mergers (between competitors) decrease competition. Imagine a three firm industry in which the competitors' market shares are as follows:
 $\begin{array}{ll}
\text { A } & 26 \% \
\text { B } & 20 \
\text { C } & 54 \%
\end{array}$ Is it possible that a merger between A and B would increase competition in the industry to the benefit of customers?

It Is Generally Accepted That Horizontal Mergers (Between Competitors) Decrease A 26% B 20 C 54%\begin{array}{ll}\text { A } & 26 \% \\\text { B } & 20 \\\text { C } & 54 \%\end{array} A B C ​26%2054%​

It Is Generally Accepted That Horizontal Mergers (Between Competitors) Decrease $\begin{array}{ll}\text { A } & 26 \% \\\text { B } & 20 \\\text { C } & 54 \%\end{array}$