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Merger consideration

1. With lower prices for gasoline than a couple of years ago will Americans start spending again? If they do, what will they spend the savings on? Vacations? Some other expenses?

2. In many industries, such as supermarkets, banks, cell phone companies, etc., because of mergers our choices as consumers are reduced to two or three competitors. Do you think this is good for the economy? What are some of the reason why mergers happen? Should the government do something about this?

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1. With lower prices for gasoline than a couple of years ago will Americans start spending again? If they do, what will they spend the savings on? Vacations? Some other expenses?
No, with a decline in the prices of gasoline the Americans will not start spending again. There are several reasons for that. First, the Americans now spend much lower sums of money on gasoline than what they did two years ago.. Most Americans have purchased and started using smaller cars and those that use lower gasoline. The savings from the fall in gas prices will be marginal. Even with the addition savings, the Americans are less likely to go a spending spree. The reason for this is that Americans are very conscious about the present economic scenario. They do not increase spending with every saving. The possibility of unemployment still looms over the Americans' horizon. The high unemployment rate of 9.6 percent is daunting. There have been salary cuts and many Americans are working at low paid jobs simply because they do not have appropriate jobs available. Vacations are out of the question because they are expensive and the savings from gasoline price reduction may not be sufficient to finance vacations.
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Solution Summary

This solution gives you a detailed discussion on Merger consideration. The expert determines what is good for the economy for three competitors.

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