Question

Charter Communications is seeking to purchase and bring together Time Warner Cable and Bright House Networks, creating a company that will serve a collective 18.8 million Internet broadband subscribers and 17 million TV subscribers. Charter has specifically cited a desire to have greater bargaining power in negotiating with channel owners like Disney. This is an example of a ___________.

Answer 1

Answer:

economies of scale

Explanation:

Economies of scale is defined as the cost advantage that a company gets to enjoy by producing on a large scale. The unit cost of a product is low as the company produces larger amount.

Also economies of scale occurs when a company is able to purchase inputs at a lower cost per unit when they are purchasing in large amounts.

Charter Communications is seeking to purchase and bring together Time Warner Cable and Bright House Networks, creating a company that will serve a collective 18.8 million Internet broadband subscribers and 17 million TV subscribers. Charter has specifically cited a desire to have greater bargaining power in negotiating with channel owners like Disney.

This creates economies of scale by improving their bargaining power when negotiating. They will be able to get input at a lower cost.