Answer / amrutha

1) economies of scale
2) carried forward losses can reduce the tax( tax benefit)
3) investment of surplus cash
4) increased market share
5) diversification
6) reduces competition
7) create effeciency

Answer / deepak das

i) technical economies if the firm has significant fixed
costs then the new larger firm would have lower average costs
ii) bulk buying – discount for buying large quantities of
raw materials
iii) financial – better rate of interest for large company
iv) Organisational – one head office rather than two is more
efficient
v)Greater Efficiency. Redundancies can be merited if they
can be employed more efficiently

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