This paper investigates the problem of how the effect of vertical integration upon the final product price is related to the production and/or the market structures. Some ambiguous results of the previous models are shown to involve the compound effect of vertical and horizontal merger. Our model considers purely vertical integration and shows that the (Lerner) index of monopoly remains unaffected before and after merger. Vertical integration is shown accordingly to yield an unambiguous decrease in the final product price--an increase in consumer welfare. Also discussed are implications for antitrust laws.