I followed the suggestion from my teacher to read a newspaper. Where I read an article about merging two major firms to become a big firm. In NCERT solutions of class 12 for economics, the question is given with the same scenario, not the answer.
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It happens when one firm is not efficient, say, because of its obsolete technology. Whereas the other firm is inefficient, say, Because of its poor managerial skill. If both the firms merge, themselves, efficiency will increase in the form of lower cost as it will collectively make use of better technology and better managerial skill.