Two existing U.S. airlines, American West Airlines and U.S. Airways, have merged. The purpose of this merger is most likely to ____ and constitutes ____ action.
A) increased diversification; vertical
B) increase market power; horizontal
C) overcome entry barriers; vertical
D) increase speed to market; related

Question

Quizplus · Accepted Answer

The purpose of the merger between American West Airlines and U.S. Airways is most likely to increase their market power, since they are both existing U.S. airlines joining together. This constitutes a horizontal action, as they are both in the same industry and are merging to potentially control a larger share of the market.

Two Existing U