What is the term used when two firms in the same stage of industry combine resources?

The term that describes the situation where two firms in the same stage of industry combine their resources is known as horizontal integration. This occurs when companies that are direct competitors in the same market merge or acquire each other, which can lead to increased market share, reduced competition, and potential economies of scale. By integrating horizontally, the firms can combine their strengths, consolidate operations, and enhance their leverage in negotiations with suppliers and customers.

In contrast, vertical integration refers to a merger between companies at different stages of production, where one firm may control both the supply of raw materials and the distribution of finished products. Market saturation involves a situation in which a market is no longer able to support new growth, as the existing supply meets the demand entirely. Monopoly formation occurs when a single firm gains exclusive control over a market, which is distinct from the concept of two firms merging at the same industry level.