A vertical merger occurs when:
A) the products of the merging firms were not related in any manner before the merger.
B) the merging partners were competitors before the merger.
C) one firm is a domestic firm, and the other is a foreign company.
D) the firms stood in a buyer-seller relationship before the merger.

Question

Quizplus · Accepted Answer

A vertical merger occurs when two firms, which were earlier in a buyer-seller relationship, merge to become a single entity. This type of merger is often adopted to achieve economies of scale, reduce costs, and increase market power. Examples include the merger between Amazon and Whole Foods, where Amazon merged with its supplier of organic products.

A Vertical Merger Occurs When