A merger between two firms that make and sell similar products in similar markets is known as a:

• A. vertical merger
• B. market extension merger
• C. conglomerate merger
• D. horizontal merger

Answer: (D)

Verified step by step guidance

1. Understand the definitions of different types of mergers: A vertical merger occurs between firms at different stages of production or distribution; a market extension merger happens between firms selling the same products but in different markets; a conglomerate merger involves firms in unrelated businesses.
2. Recognize that a horizontal merger is a combination of two firms that produce and sell similar products in the same or similar markets.
3. Analyze the problem statement: since the firms make and sell similar products in similar markets, this fits the definition of a horizontal merger.
4. Eliminate other options by matching their definitions to the scenario given: vertical, market extension, and conglomerate mergers do not fit the description of firms producing similar products in similar markets.
5. Conclude that the correct classification for the merger described is a horizontal merger.