Economics 9708 · AS & A Level · 7.7

7.7 — practice question

Two manufacturing firms operating in the same industry and making similar products are thinking about merging. Which reason would be the least convincing for a merger?

  • AIt would enable greater bargaining power when buying raw materials.
  • BIt would enable technical economies of scale.
  • CIt would produce savings in management and administration costs.
  • DIt would reduce the dependence of the firms on the suppliers of raw materials.

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