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3.1 (Why do firms grow? (Economies of scale, Increased market share - more…
3.1
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Conglomerate integration
Occurs when a firm buys another firm in completely unrelated business, eg, Virgin
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Principle Agent Problem
When agents make a decision for the principal, but the agent is inclined to act to their own interests.
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External growth
Firms grow by buying out other firms, either by agreement or take over them