Which of the following type of merger decreases competition?
A)A horizontal merger
B)A vertical merger
C)A cash purchase
D)A stock-for-stock exchange

Question

Quizplus · Accepted Answer

A horizontal merger involves companies that produce similar goods or services and are direct competitors. Therefore, a horizontal merger decreases competition as it eliminates one of the competitors from the market. Vertical mergers, on the other hand, involve companies at different stages of the supply chain and may actually increase competition. Cash purchases and stock-for-stock exchanges are simply methods of payment for a merger and do not necessarily impact competition.

Which of the Following Type of Merger Decreases Competition