Question:

5 In 2020, investment in vaccine production was very high. There was a plan for a major vaccine producer to horizontally merge with another firm but the plan was cancelled. This was not surprising as a similar merger of two firms in the same industry had failed the previous year. However, most
firms in this industry are still meeting their objectives and also creating many external benefits for
the wider economy.
(a) Identify two benefits of a horizontal merger. [2]
(b) Explain two possible external benefits of vaccines. [4]
(c) Analyse potential reasons why a merged firm may fail. [6]
(d) Discuss whether or not investment is beneficial to an economy. [8]

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