A primary reason for a firm to pursue an acquisition is to:
A) avoid increased government regulation.
B) achieve greater market power.
C) avoid competition.
D) achieve greater financial returns in the short run.

Question

Quizplus · Accepted Answer

One of the primary reasons for a firm to pursue an acquisition is to achieve greater market power. This can allow the firm to increase its market share, reduce competition, and potentially generate greater profits in the long run. While avoiding government regulation or competition may be secondary benefits of an acquisition, the primary goal is typically to strengthen the firm's position within the market. Achieving greater financial returns in the short run may also be a consideration, but the long-term benefits are generally seen as more important.

A Primary Reason for a Firm to Pursue an Acquisition