--%>

Problem on merging firms

Elucidate how the efficiency might increase when two firms merge?

Answer: If the two firms merge, their joined efficiency is expected to enhance owing to:

(i) Rise in the scale of output and the resultant economies of scale.
(ii) Better division of labor and specialization; and
(iii) Utilization of better technology, saving the cost of production.

   Related Questions in Microeconomics

  • Q : Capital to Labor Ratio When the

    When the capital-to-labor (K/L) ratio raises: (1) capital becomes more productive. (2) the interest payments to capital will raise. (3) the wages to labor will probably reduce. (4) labor productivity should rise. (5) the price of capital increases.

  • Q : When is not total annual revenue

    As per this demonstrated figure in below, unless something changes the total annual revenue of Robot Butlers, Inc. Can’t exceed: (1) $10,000. (2) $20,000. (3) $100 million. (4) $200 million. (5) $400 million.

  • Q : Problem on marginal returns Select the

    Select the right ans wer of the question. Refer to the following data. Diminishing marginal returns become evident with the addition of the: A) sixth worker B) fourth worker. C) third worker. D) second worker.

    Q : Multinational corporations Give the

    Give the answer of following question. Multinational corporations: A) mainly are headquartered in Switzerland. B) are so named because of their heavy export volume. C) are illegal under the U.S. antitrust laws. D) are so named because of their sizable foreign producti

  • Q : Production Costs in generating goods

    Production possibilities frontiers be inclined to concave (or bowed out) from the origin as: (1) goods differ in their capacities to gratify individual needs. (2) A land, labor and capital mix is needed for all the production. (3) People vary in their

  • Q : Shift in demand in the price of auto

    Can someone please help me in finding out the accurate answer from the following question. The price per mile of mass transit has increases much rapid since the year 1980 than the price of private auto travel. This has contributed to the shift in demand

  • Q : Twenty-one amendment of public polices

    Drive-by shootings by that several groups of beer or liquor distributors or producer attempted to liquidate rival groups largely finished while the: (w) U.S. Constitution was ratified and Whiskey Rebellion which began into 1794 finally finished. (x) 21st amendment to

  • Q : Economics expectations of price hike

    expectations of price hike for durable goods tend to:

  • Q : Monopolistic Exploitation dilemma In

    In equilibrium for the price maker firm, the rate of monopolistic exploitation is the difference between: (p) P and MR. (q) P and MC. (iii) Total revenue and net cost per unit of output. (r) Output price and rate of monopsonistic exploitation. (s) VMP and MRP.

  • Q : Rate of return onto investment When the

    When the rate of return on investment equals the interest rate, in that case investment will: (w) rise. (x) fall. (y) not change. (z) Any of the above is possible. Hey friends please give your opin