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CS Professional · Corporate Restructuring, Valuation and Insolvency · Regulation of Combinations

While defining the relevant geographic market for a cement merger, the Commission looks at transport costs, consumer preferences and the costs of switching supply or demand to other areas. Which statement is correct under section 19?

Transport costs, consumer preferences and costs of switching supply or demand to other areas are all listed in section 19(6) as factors for determining the relevant geographic market. The Commission considers all or any of them, not just one.

  1. AThese are all factors listed in section 19(6) for the relevant geographic marketCorrect
  2. BTransport costs belong to section 19(7) for the relevant product market
  3. CSwitching costs between areas are a factor only for dominance under section 19(4)
  4. DThe Commission may consider only one such factor at a time

Explanation

Section 19(6) lists transport costs, consumer preferences, and costs associated with switching supply or demand to other areas as geographic market factors. Section 19(7) covers product market factors such as price and end-use. The Commission has regard to all or any of the factors, so it is not limited to one.

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