A merger will lead to a bigger firm and a greater market concentration

A merger will lead to a bigger firm and a greater market concentration. This can have both advantages and disadvantages for the public interest. A merger is likely to reduce competition and give the new firm more market power. Therefore, it will be able to increase prices leading to a decline in consumer surplus and could cause economic inefficiency. This occurs when goods are not distributed optimally according to consumer preferences. However, it depends upon the market share of the new firm. When, if ever should a government intervene to prevent a merger or takeover? 

Instructions:

You will need to do an in-depth literary search on the topic in order to create a fully-developed response. You will need to include in-text citations and a references list for external references used in supporting your points for this question. You should have no fewer than 7 references for your response to this particular question, 4 of which must be from peer-reviewed sources.

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