Explanation
Correct answer: C.
Choice C is the best answer because, based on the information presented in the texts, it represents how Focarelli and Panetta would most likely respond to Fan’s findings. Text 1 indicates that Fan found that a newspaper merger would result in a rise in subscription prices. This rise wouldn’t benefit customers, who would have to pay more for news after a merger. Text 2 presents Focarelli and Panetta’s argument that merger research tends to focus too much on what happens immediately after the merger. Text 2 goes on to describe their finding that mergers can be economically beneficial for consumers over the long term. This suggests that Focarelli and Panetta would encourage Fan to investigate the long-term effect of the hypothetical newspaper merger on subscription prices.
Why the other choices are wrong
Choice A
Choice A is incorrect because Text 2 doesn’t indicate that Focarelli and Panetta connect the effects of mergers to specific locations. Instead, Focarelli and Panetta focus on the length of time over which the effects of mergers should be evaluated.
Choice B
Choice B is incorrect because Text 2 indicates that Focarelli and Panetta found that merged companies experience "efficiency gains" over the long term, meaning that their expenses go down relative to their output, not that their expenses increase.
Choice D
Choice D is incorrect because there’s no indication in Text 2 that Focarelli and Panetta believe that the newspaper industry is different from any other industry when it comes to the effects of mergers. Although their own research was about consumer banking, Text 2 suggests that they view their conclusions as applicable to mergers in general.