It is necessary for government authorities such as the Federal Trade Commission (FTC) and/or the European Commission to approve any large horizontal integration activity becauseA) the horizontal integration activity changes the industry structure from oligopolistic to monopolistically competitive. B) the surviving firms will need to be protected against the increasing bargaining power of the suppliers. C) the horizontal integration activity has the potential to reduce competitive intensity in an industry. D) the surviving firms will need protection against the relaxed entry barriers.

Question

Business

Valentin Buck

11 March, 20:43

It is necessary for government authorities such as the Federal Trade Commission (FTC) and/or the European Commission to approve any large horizontal integration activity becauseA) the horizontal integration activity changes the industry structure from oligopolistic to monopolistically competitive. B) the surviving firms will need to be protected against the increasing bargaining power of the suppliers. C) the horizontal integration activity has the potential to reduce competitive intensity in an industry. D) the surviving firms will need protection against the relaxed entry barriers.

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Cristian Johnston · Answer 1

C. The horizontal integration activity has the potential to reduce competitive intensity in an industry.

Explanation:

Horizontal integration is referred to the purchase of a business that operates in a different or similar industry and is at per with the value chain. It is considered as a strategy to possess a competitive edge by increasing product differentiation, market power over suppliers and distributors, and creating economies of scale.

Therefore, it is important for government authorities such as the Federal Trade Commission (FTC) and/or the European Commission to approve any large horizontal integration activity because the horizontal integration activity has the potential to reduce the competitive intensity in an industry.