1. (30) True or False (explain your answer briefly. A simple \"true\" or \"false\" without explanation will...

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Economics

1. (30) True or False (explain your answer briefly. A simple\"true\" or \"false\" without
explanation will get zero point)
a) (6 points) An upper stream manufacturing rm merges with anotherdownstream distri-
bution firm so as to engage in price discrimination. Such avertical merger will decrease all
consumer'swelfare.
b) (6 points) Two firms merge together, only if the transactioncost must be reduced.
c) (6 points) Specic human capital is a barrier of verticalintegration.
d) (6 points). The benet of coordination gives rise to verticalintegration.
e) (6 points). Social welfare decreases after two firms merge witheach other.

Answer & Explanation Solved by verified expert

3.7 Ratings (457 Votes)

a Note that vertical merger is a condition where the two and more stages of production which previously operated by different firms got integrated With the vertical merger as firms get access to two different markets they now engage in price discrimination This is because with more control or complete control monopolist across the processes in an industry the higher prices can now be See Answer

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