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Paper 1 · June 2019 · Business Growth and Ownership

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

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