Economics (AS & A Level) · May / June 2025 · Paper 32 · Question 7
9708Growth and survival of firms
Two manufacturing firms in the same industry, producing similar products, are considering merging together. What would be the least convincing reason for merging?
- 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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Correct answer: D. It would reduce the dependence of the firms on the suppliers of raw materials.
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