Mergers Reduce Product Variety for Customers

Steps:

• Identify the context: A merger combines two manufacturers, potentially altering market dynamics.
• Evaluate each option: Assess if it benefits or harms customers post-merger.
• Focus on disadvantages: Look for outcomes that limit customer choices or increase costs.
• Select the clear negative: Pinpoint the option reducing options for buyers.

Why C is correct:

• Mergers can lead to less competition, reducing product diversity as defined in antitrust laws, limiting customer choices in vehicles.

Why the others are wrong:

• A: More R&D capital improves innovation and product quality for customers.
• B: Economies of scale lower production costs, enabling cheaper prices for customers.
• D: Broader marketing data enhances targeted offerings, benefiting customer satisfaction.

Final answer: C