Question

Imagine you are the owner of a business that makes cell phone covers. You have the opportunity to purchase other companies that make the same product as you. Eventually, you own all the major cell phone cover companies in the US. What economic principle is explained by the above scenario?

Answer 1

The correct answer would be, Take Over.

Imagine you are the owner of a business that makes cell phone covers. You have the opportunity to purchase other companies that make the same product as you. Eventually, you own all the major cell phone cover companies in the US. Take over principle is explained by the above scenario.

Explanation:

When one company, purchases another company, it is called as take over. Take overs happen when a comparatively larger company purchases the smaller company.

Take overs can happen in a friendly and welcoming environment, and also can happen in a hostile or unwelcoming condition or situation.

So when you purchase the other companies which are in the same business as you, because of any reason, this is called as take over.

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