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WAEC Commerce 1994 Question 62

Question 62

Business Combinations

Firms merge in order to

  1. A.discourage the employment of specialists
  2. B.encourage competition
  3. C.discourage the use of each other's bye-products
  4. D.create a monopoly
  5. E.decrease the size of the business
Show the answer and explanation

Answer: D (create a monopoly)

Explanation

Merging reduces competition and can give the combined firm monopoly power.