Question

PureSource Pharma Inc. recently acquired BioChem Pharmaceuticals Inc. It now sells its own products along with the products originally sold by BioChem Pharmaceuticals. As a result, PureSource Pharma's sales force will also be marketing the acquired company's products. How will this horizontal integration most likely affect PureSource Pharma?

A. PureSource Pharma will lower its costs through economies of scale.

B. PureSource Pharma will diminish its economic value creation.

C. PureSource Pharma will increase its cost of distribution.

D. PureSource Pharma will reduce the size of its sales force.

Answer 1

A.

Step-by-step explanation:

Based on the scenario being described within the question it can be said that this will most likely affect them by allowing PureSource Pharma to lower its costs through economies of scale. Meaning that they will incur less costs for every additional unit that they generate as output. Whether it is their or another acquired company's product.