In general, horizontal mergers will
A) increase the number of firms in an industry.
B) decrease the number of firms in an industry.
C) increase competition in an industry.
D) reduce economic profits in an industry.

Question

Quizplus · Accepted Answer

Horizontal mergers involve the combination of firms that operate in the same industry and often result in a decrease in the number of firms in that industry. This can lead to decreased competition and potentially increased market power for the merged entity, which may result in higher prices and reduced consumer surplus. However, the effects on economic profits will depend on the specific circumstances of the merger and the industry in question.

In General, Horizontal Mergers Will