A merger between firms at different stages of production of a good
A)is a vertical merger.
B)was made illegal by the Sherman Act.
C)was made legal by the Clayton Act.
D)is a horizontal merger.

Question

Quizplus · Accepted Answer

A merger between firms at different stages of production of a good is a vertical merger. This type of merger involves firms that either produce the same good/service but at different stages of production or produce complementary goods/services that are needed to create a final product. Vertical mergers were not made illegal by the Sherman Act, but some types of these mergers may be considered anticompetitive and subject to scrutiny by antitrust regulators. The Clayton Act made some types of mergers, including certain vertical mergers, subject to government scrutiny and regulation.

A Merger Between Firms at Different Stages of Production of a Good