Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

What is the term for when all producers of a particular service merge together?

1. Monopoly

2. Oligopoly

3. Horizontal Integration

4. Market Development

The correct answer is: Monopoly

The correct term for the situation described, where all producers of a particular service merge together, is horizontal integration. This concept refers to the consolidation of firms that are operating at the same level in the supply chain or within the same industry, resulting in a larger entity that controls a significant share of the market for a particular service or product. Monopoly, while it describes a market structure where a single seller dominates the market, does not specifically indicate that multiple producers have merged. Oligopoly refers to a market structure dominated by a few large producers, but it does not imply that they have merged into a single entity. Market development typically refers to strategies aimed at increasing the market share of a product or service, which is unrelated to the merging of producers. Thus, horizontal integration best describes the merger of all producers within a specific service type.