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Elemental Pharma Inc. recently acquired Crick Pharmaceuticals Inc. It now sells its own products along with the products originally sold by Crick Pharmaceuticals. As a result, Elemental Pharma's sales force will also be marketing the acquired company's products. How will this horizontal integration most likely affect Elemental Pharma?

Answer :

oopsydaisy

The correct answer is; economies of scale.

Further Explanation:

This type of horizontal integration will be affected by the economies of scale. This is when a large company buys or acquires another and takes it stock. They are then able to acquire more goods at a lower per unit cost than smaller stores can. This gives the business that bought out the second business an advantage. They will be able to make more money and reduce prices on some items that they could not before.

There are two types of economies of sale, such as;

  1. Network economies of scale.
  2. Managerial economies of scale

These business can afford to hire specialists to advise them how to proceed in buying large quantities of goods and advertising.

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