Read each question and choose the best answer.

Question

The owner of a factory that manufactures clothing buys several clothing stores to sell the clothing the factory produces. This is an example of
A. a horizontal merger.
B. a vertical merger.
C. a conglomerate.
D. a multinational corporation.

Answer 1

The best answer is:

B. a vertical merger.

This is because a vertical merger occurs when a company expands its operations into different stages of production within the same industry, such as a manufacturer acquiring retail outlets to sell its products directly.