Question

ConAgra, a diversified food producer, increases its power over suppliers by centrally purchasing huge quantities of packaging materials for all its food divisions. This is an example of using Multiple Choice unrelated diversification to acquire financial synergies through portfolio management. related diversification to acquire economies of scope by leveraging pooled negotiating power. unrelated diversification to acquire parenting, restructuring, and financial synergies through restructuring and parenting. related diversification to acquire market power by leveraging pooled negotiating power.

Answer 1

The correct answer is Related Diversification: Market Power

Explanation: Market Power is the control that a firm (or group of firms) has over the price and level of quantity produced of a good. In this sense, perfect competition is not characterized by the existence of market power and the monopoly is characterized by the existence of high market power.