Paper 1 · Privatisation and mergers
A merger between two businesses in the same industry and at the same stage of production, such as two fuel suppliers combining, is called a ___ merger.
Model answer
horizontal
Also accepted: horizontal merger
Explanation: Combining with a business at the same stage of production in the same industry, such as another fuel supplier, is a horizontal merger; it lets the firms eliminate a competitor, gain economies of scale and increase power over suppliers.
Derived from ZIMSEC Business_studies Paper 1, June 2019, Q2
