Regarding the merger in Q8: "Mike Coupe, the boss of Sainsbury’s, had claimed that prices would fall by as much as 10%." Which merger explanation can be behind such a fall in prices, if realized? a) Managerial theories of mergers. b) Economies of scale. c) Increased market power. d) Valuation discrepancy. e) Both economies of scale and increase in market power.
Regarding the merger in Q8: "Mike Coupe, the boss of Sainsbury’s, had claimed that prices would fall by as much as 10%." Which merger explanation can be behind such a fall in prices, if realized? a) Managerial theories of mergers. b) Economies of scale. c) Increased market power. d) Valuation discrepancy. e) Both economies of scale and increase in market power.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Regarding the merger in Q8:
"Mike Coupe, the boss of Sainsbury’s, had claimed that
Which merger explanation can be behind such a fall in prices, if realized?
a) Managerial theories of mergers.
b) Economies of scale.
c) Increased market power.
d) Valuation discrepancy.
e) Both economies of scale and increase in market power.
Transcribed Image Text:8
In 2019, competition authorities threw out a merger of
Asda and Sainsbury's. What type of growth would the
merger of Asda and Sainsbury's have represented?
Horizontal expansion
Horizontal integration
Conglomerate merger
000
94
Vertical integration
Horizontal alliance
Continuing with the question above, if Sainsbury's
shareholders are concerned with managements'
behaviour, which of the following options is LIKELY to
help?
Linking managers' salaries to the firm's growth
rates.
Providing stock options for the managers.
Linking manager's salaries to the firm's revenue.
Raising the manager's salaries.
All of these will help.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education