Which of the following are the motives of mergers? Indicate the correct answer: 1. Gain the economies of scale. 2. Utilize under-utilized resources. 3. Break the monopoly. 4. Reduce tax liability

The correct answer is B. 1, 2 and 4.

• Gain the economies of scale: When two companies merge, they can often achieve economies of scale by combining their operations. This can lead to lower costs and higher profits.
• Utilize under-utilized resources: When two companies merge, they may have resources that are not being used to their full potential. By merging, the companies can often utilize these resources more effectively, which can lead to cost savings and increased profits.
• Reduce tax liability: In some cases, companies may merge in order to reduce their tax liability. This can be done by transferring assets to a new company that is in a lower tax bracket.

Option 3 is not a motive for mergers. A merger is not a way to break up a monopoly. In fact, mergers can often lead to the creation of monopolies.