Scelta multipla
Under which of the following circumstances does a merger between companies typically occur?
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12. Monopoly
Mergers and the Herfindahl-Hirschman Index (HHI)
Scelta multipla
The joining of two firms in the same industry is a(n) ______ merger.
A
diagonal
B
conglomerate
C
vertical
D
horizontal
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Understand the types of mergers by their definitions: A horizontal merger occurs when two firms in the same industry and at the same stage of production combine.
Recognize that a vertical merger involves firms at different stages of production within the same industry, such as a supplier merging with a manufacturer.
Identify that a conglomerate merger is between firms in completely unrelated industries, combining diverse business activities.
Note that a diagonal merger is less commonly used but generally refers to firms that are related but not directly in the same industry or production stage.
Since the problem states the joining of two firms in the same industry, the correct classification is a horizontal merger.
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