If Apple, a company that produces smartphones, purchases a company that specializes in developing phone apps, we would have an example of
A) a horizontal merger.
B) a vertical merger.
C) a monopoly.
D) excessive product differentiation.

Question

Quizplus · Accepted Answer

This is an example of a vertical merger because Apple is acquiring a company that is within the same industry but at a different stage in the supply chain. The app development company will be integrated into Apple's operations to enhance its smartphone offerings, creating more value for the end consumer.

If Apple, a Company That Produces Smartphones, Purchases a Company