Final answer:
When two companies that make water valves for plumbing contractors merge, it constitutes a horizontal merger, where firms at the same market level combine.
Step-by-step explanation:
If two companies that both make water valves for plumbing contractors merge, it would be an example of a horizontal merger. This type of merger occurs when two or more firms that produce the same kind of product join together. The primary reasons for such mergers include the desire to grow larger, become more efficient, acquire new product lines, eliminate a rival, or lose corporate identity. Unlike a vertical merger, which involves companies at different steps of the manufacturing process, or a conglomerate merger, which consists of firms making unrelated products, a horizontal merger joins companies at the same level of the market providing similar products or services.