Hewlett Packard and Compaq recently completed a merger.The combined firm is larger and therefore can negotiate lower prices from suppliers.This benefit of horizontal integration is called
A)economies of scale.
B)reduction of excess capacity.
C)cross-selling.
D)product bundling.
E)market power.

Question

Quizplus · Accepted Answer

Market power is the ability of a firm to influence the price of a product or service in its favor. Horizontal integration can lead to market power because it allows firms to increase their market share and reduce competition.

Hewlett Packard and Compaq Recently Completed a Merger