The downsides or limitations of mergers and acquisitions include all the following except:

• A. Risk of decreased innovation
• B. Increased market competition
• C. Possible job losses from consolidation
• D. Potential for higher prices due to reduced competition

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the context of mergers and acquisitions (M&A). M&A typically involve the combination of two companies, which can affect market structure, competition, and internal company dynamics.
2. Step 2: Identify common downsides or limitations of M&A. These often include risks such as decreased innovation (due to less competitive pressure), job losses (from consolidation and redundancies), and potential for higher prices (because of reduced competition).
3. Step 3: Analyze the option 'Increased market competition' in the context of M&A. Since mergers usually reduce the number of competitors, they tend to decrease competition rather than increase it.
4. Step 4: Conclude that 'Increased market competition' is not a downside of M&A, but rather the opposite effect, making it the correct exception in the list.
5. Step 5: Summarize that the correct answer is the option that does not represent a downside or limitation of M&A, which is 'Increased market competition'.