Question

A primary reason for a firm to pursue an acquisition is to:

a. avoid increased government regulation.
b. exit a hyper-competitive market.
c. achieve greater market power.
d. achieve greater financial returns in the short run.

Answer 1

c. achieve greater market power.

Step-by-step explanation:

Acquisitions to meet a market power objective generally involve buying a supplier, a competitor, a distributor, or a business in a highly related industry. Though a number of firms may feel that they have an internal core competence, they may be unable to exploit their resources and capabilities because of a lack of size.