If the average cost per unit decreases when a horizontal merger occurs then the combined firm is benefiting from synergy arising from:
A) A reduction in net working capital.
B) A beachhead.
C) Economies of scale.
D) Market power.
E) Revenue enhancement.

Question

Quizplus · Accepted Answer

Economies of scale occur when increasing production leads to a lower cost per unit, which can happen after a horizontal merger as the combined firm can operate more efficiently.

If the Average Cost Per Unit Decreases When a Horizontal