<p>Horizontal integration may lead to lower costs by profiting from economies of scale. If the market demand for a product is spread over many enterprises, the costs will be generally higher because there will be more fixed costs in total. Instead, if there was a single company, fixed costs would be comparatively smaller.</p>

<p>The effect on the overall economy would be good. Lower costs mean more money for the company and/or lower prices for consumers. The effect on the consumers is not clear. </p>

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2019-05-04T14:46:58.000Z
2019-05-04T14:55:45.720Z
2019-05-04T14:55:45.720Z
unmovedmover
<p>I understand that limited vertical integration can lead to a lowering of prices for products and services, but it seems to me that even limited horizontal integration only leads to less competition.</p>

<macroeconomics>
What are the benefits to the overall economy and consumer of horizontal integration?
John
# What are the benefits to the overall economy and consumer of horizontal integration?

(Asked by: username_0 on 2019-05-04)

I understand that limited vertical integration can lead to a lowering of prices for products and services, but it seems to me that even limited horizontal integration only leads to less competition.

**Tags:** macroeconomics


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## 1 answers

### Answer by username_1 on 2019-05-04. Score: 2

Horizontal integration may lead to lower costs by profiting from economies of scale. If the market demand for a product is spread over many enterprises, the costs will be generally higher because there will be more fixed costs in total. Instead, if there was a single company, fixed costs would be comparatively smaller.

The effect on the overall economy would be good. Lower costs mean more money for the company and/or lower prices for consumers. The effect on the consumers is not clear.


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