If Happy Cows, a dairy firm, merges with Best Cartons, a manufacturer of dairy cartons, and the combined firm is able to reduce the number of executive managers, the merger created______ .
A)managerial diseconomies
B)technological interdependencies
C)a hold- up problem
D)synergies

Question

Quizplus · Accepted Answer

When Happy Cows and Best Cartons merge and reduce the number of executive managers, the merger creates synergies. Synergies occur when two firms combine, and the whole is greater than the sum of its parts. In this case, the two firms can now work together more efficiently and effectively, resulting in cost savings and increased profits. By reducing management positions, the combined firm can also benefit from economies of scale, further increasing productivity and profitability.

If Happy Cows, a Dairy Firm, Merges with Best Cartons