An example of a vertical combination is the merger of_________

Analyze the question: The question asks which merger is a vertical combination (integration).

Concept:

• Horizontal combination: firms at the same stage of production or distribution, producing the same or similar goods or services, merge (e.g., two bakeries).
• Vertical combination: firms at different stages of the production chain of the same product merge (e.g., raw material → processing → manufacturing → distribution).
• Conglomerate combination: firms in unrelated businesses merge.

Step-by-step solution:

• A. A spinning firm and a weaving firm: Spinning turns fibre into yarn, and weaving turns yarn into cloth. These are consecutive stages in textile production, so this is vertical. (The question says "wearing", which is almost certainly a typo for "weaving". Weaving is the stage that follows spinning.)
• B. Two meat retailing firms: Both are at the retail stage, so this is horizontal.
• C. Two very large wholesale textile distributors: Both are at the wholesale stage, so this is horizontal.
• D. Three secretarial employment agencies: All offer the same service, so this is horizontal.

Answer: Only option A joins firms at different stages of the same production process.

Exam tip: Think of vertical as going up or down the production ladder (from raw material to finished product to the shop). If the merging firms do the same job, it is horizontal. If they do different jobs in the same production chain, it is vertical.