Question

How did horizontal integration limit competition?

A) Fewer independently owned companies existed to compete.
B) Companies agreed not to compete, so they all made more money.
C) More small companies tried to supply the wrong materials to large companies.
D) Suppliers could not produce enough to serve horizontally integrated companies.

Answer 1

Horizontal integration limited competition by reducing the number of independent competitors, leading to monopolies or oligopolies that could control market prices and output. This type of integration limits competition because it leads to fewer independently owned companies that can compete within the market.

Step-by-step explanation:

Horizontal integration is a business strategy where a company acquires or merges with its competitors in the same industry. This type of integration limits competition because it leads to fewer independently owned companies that can compete within the market. When companies engaged in horizontal integration, they effectively reduced the number of competitors, creating monopolies or oligopolies that could control prices and output, which could lead to higher costs for consumers and stifle innovation due to a lack of competitive pressure.

Horizontal integration limited competition by reducing the number of independent competitors, leading to monopolies or oligopolies that could control market prices and output