The merger of two companies producing same type of produce is an example of
The merger of two companies producing same type of produce is an example of
- A) Vertical integration
- B) Horizontal integration
- C) Internal merger
- D) An acquisition
Correct Answer: B) Horizontal integration
Explanation
To understand the correct answer, let's look at the options.Option A, vertical integration, refers to a situation where a company acquires or merges with another company that is at a different stage of the production process. For example, a car manufacturer merging with a tire manufacturer would be an example of vertical integration.
Option B, horizontal integration, is the correct answer. Horizontal integration occurs when two companies in the same industry or market merge or acquire each other. In this case, the two companies producing the same type of product are merging, which is an example of horizontal integration.
Option C, internal merger, is not the correct answer. An internal merger refers to the combination of different departments or divisions within the same company, not two separate companies.
Option D, an acquisition, is not the correct answer either. An acquisition is when one company purchases another company, rather than two companies merging together.
Therefore, the correct answer is Option B: Horizontal integration, as it describes the situation where two companies producing the same type of product merge together.