Question

A horizontal merger

A. is a merger between firms in the same industry.
B. was illegal in the United States until the Federal Trade Commission Act was passed by Congress in 1914.
C. is a merger between firms at different stages of production of a good.
D. results in a trust​ (for example, the Standard Oil​ Company).

Answer 1

A) Is a merger between firms in the same industry

Step-by-step explanation:

A horizontal merger occurs when companies that offer a similar service of product join in order to gain a comparative advantage.

For example, if two pharmaceutical companies or two restaurant chains merge, we have an example of an horizontal merger.

Horizontal mergers can benefit companies in mainly two ways:

• If the companies sell similar products, they can increase the market share.
• If the companies sell complementary products, they can increase the range of products that they offer.