The removal of some government controls over a market is called. deregulation.

a Government regulates oligopoly by making them behave like competing firms so that they don’t become oligopolists firms. b Government has made these regulations so that they do not increase prices illegally and damage the customers.

lower costs and consumer prices or lead to a better product. How has deregulation helped consumers in some industries? by lowering prices. How much control over price do companies in a perfectly competitive market have?

What is the intent if both deregulation and antitrust laws? To increase competition.

The four conditions of monopolistic competition are many firms, few artificial barriers to entry, slight control over price, and differential products.

The government will approve a merger if they predict that it will lower overall average costs and lead to lower prices, more reliable products or service, and a more efficient industry.

Before a large merger happens, the antitrust regulators at the FTC and the U.S. Department of Justice can allow the merger, prohibit it, or allow it if certain conditions are met. The U.S. government approves most proposed mergers. In a market-oriented economy, firms have the freedom to make their own choices.

Antitrust. By virtue of the Sherman Antitrust Act of 1890, the US government can take legal action to break up a monopoly. In 1902, President Theodore Roosevelt used the Sherman Antitrust Act as a basis for trying to break up the monopolization of railway service in the United States.

Section 7 of the Clayton Act prohibits mergers and acquisitions when the effect “may be substantially to lessen competition, or to tend to create a monopoly.” The key question the agency asks is whether the proposed merger is likely to create or enhance market power or facilitate its exercise.

Several additional factors, including price discrimination and failing firms, affect the government’s decision to sue and thus block mergers.

In theory, a merger of equals is where two companies convert their respective stocks to those of the new, combined company. However, in practice, two companies will generally make an agreement for one company to buy the other company’s common stock from the shareholders in exchange for its own common stock.

Benefits of a Vertical Merger Vertical mergers are helpful because they can help improve operational efficiency, increase revenue, and reduce production costs. Synergies can be created with vertical mergers since the combined entity typically has a higher value than the two individual companies.

The disadvantage of vertical integration is that it reduces the amount of diversification that an organization can access. If disruptions within the supply chain occur, then the entire operation is put at-risk until the supply chain can be restored.

Horizontal mergers or takeovers occur when two firms come together at the same level. Vertical mergers or takeovers occur when firms in different sectors come together.

The advantages include increasing market share, reducing competition, and creating economies of scale. Disadvantages include regulatory scrutiny, less flexibility, and the potential to destroy value rather than create it.

Merging companies face problems such as: Bureaucratic controls: There may be legal repercussions if the horizontal merger creates a company that may be considered a monopoly. Horizontal mergers are scrutinized in the US because the combination of competitors can create a monopoly and raise prices for the consumer.

Horizontal integration is when a business grows by acquiring a similar company in their industry at the same point of the supply chain. Vertical integration is when a business expands by acquiring another company that operates before or after them in the supply chain.

Horizontal growth typically means expanding the product or service to new markets, be it new geographies or business domains. This might be product localization issues or industry-specific business aspects. However, a vertical growth strategy is typically more lucrative and can result in better long-term ROI.

A horizontal merger is defined as one business acquiring another that is in direct competition with it. A vertical merger is defined as one business acquiring another that belongs to the same supply chain.

When a company employs a vertical growth strategy they take over a function previously held by a supplier. In contrast, companies that pursue a horizontal growth strategy expand their products or services into new markets, increasing the size of their target audience.

A horizontal acquisition is a business strategy where one company takes over another that operates at the same level in an industry. Vertical integration involves the acquisition of business operations within the same production vertical.

Teamwork, collaboration and the exchange of ideas are the hallmarks of a horizontal organization.

Vertical leadership, like command and control, largely goes one way – from top down. But horizontal leadership is best practiced through trust, and trust is bi-lateral; you have to be good at trusting, and at being trusted.

A flat organization (also known as horizontal organization) has an organizational structure with few or no levels of middle management between staff and executives.

Vertical leadership is the application of vertical development in the leadership journey. In the context of leadership, this might mean training in competencies such as time management, conflict resolution, and learning how to effectively lead a team.

Businesses are organized in one of two ways: vertically or horizontally. Traditional, vertically organized companies have three levels of management: top management, middle management, and supervisory-level management. Horizontal companies have top and middle management.