Mergers always decrease welfare as there is a reduction in competition.

Question

Quizplus · Accepted Answer

This statement is false. While mergers can lead to a reduction in competition in certain markets, they can also bring benefits such as economies of scale, increased efficiencies, and access to new markets or technologies. The overall effect on welfare depends on various factors, including the degree of market power the merged entity holds, the ease of entry for new competitors, and the nature of the goods or services being provided.

Mergers Always Decrease Welfare as There Is a Reduction in Competition