In COBOL, the MERGE verb combines multiple pre-sorted input files into a single sorted output file. Unlike the SORT verb, MERGE does not support INPUT PROCEDURE because the input files must already be sorted - MERGE only merges existing sorted files. OUTPUT PROCEDURE is supported to process the merged output. Option A is incorrect because KEY data items with OCCURS clause are not allowed. Option B is incorrect because MERGE implicitly opens files. Option C is incorrect because OUTPUT PROCEDURE cannot contain SORT or MERGE statements.