WAEC Commerce 2021 Theory — Question 1

Model answer

(a) An acquisition is a form of business combination whereby one company/firm buys or takes over another; there is a bigger/more powerful firm taking over the other entirely, and in most cases the acquiring company's name and policies are retained. A merger is a form of business combination whereby two companies come together to form a single, large company, combining names/logos, with no single company imposing itself on the other. (b) Importance of commerce to a nation: i. Commerce promotes trading activities which contribute to economic growth and development. ii. It provides job opportunities, reducing pressure on government and unemployment. iii. Through commerce, government generates more taxes and revenue to execute developmental programmes. iv. It removes obstacles that hinder easy buying and selling. v. It lessens the burden of producers by providing appropriate places to present and display goods. (Also: it satisfies people's wants, fosters good relationships between persons and countries.)