During 2020, spending on vaccine production was extremely high. A proposal existed for a large vaccine producer to horizontally merge with another firm, yet the proposal was dropped. That was unsurprising because a similar merger between two firms in the same industry had collapsed the year before. Even so, most firms in this industry are still achieving their targets and also generating many external benefits for the wider economy.
(a)[2]
Identify two advantages of a horizontal merger.
(b)[4]
Explain two possible external benefits that vaccines can create.
(c)[6]
Analyse possible reasons why a merged firm might fail.
(d)[8]
Discuss whether investment brings benefits to an economy.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Economies of scale / reduced costs” …