ATamp;T argued that the merger with T-Mobile should be approved by the Justice Department because
A) It will result in higher prices for consumers.
B) There are many wireless providers available for consumer.
C) ATamp;T will gain additional wireless towers from T-Mobile.
D) The merger will lead to efficiencies because a larger firm can enjoy economies of scale and can keep prices low.

Question

Quizplus · Accepted Answer

AT&T argued that the merger with T-Mobile would lead to efficiencies because a larger company can enjoy economies of scale and keep prices low. This argument implies that the merged company would have lower costs and therefore could potentially pass on those savings to consumers in the form of lower prices. Therefore, the best choice is D.

A is incorrect because it goes against the idea of the merger leading to efficiencies and lower prices.
B is incorrect because while there are other wireless providers available, the merger would reduce the number of major national wireless providers from four to three, potentially leading to less competition.
C is incorrect because while AT&T would gain additional wireless towers from T-Mobile, this alone would not necessarily justify the merger.

ATamp;T Argued That the Merger with T-Mobile Should Be Approved