Bling, Inc. produces jewelry that it sells to retail jewelry stores. One of Bling's customers is Ice Jewels, a chain of jewelry stores with locations in dozens of malls across the U.S. Both Bling, Inc. and Ice Jewels want to make a profit off the merchandise manufactured by Bling, Inc. This scenario is best described as .

Question

Quizplus · Accepted Answer

The scenario is best described as double marginalization because both Bling, Inc. and Ice Jewels want to make a profit, which can lead to pricing markups at each level and ultimately increased prices for consumers. This creates double marginalization, where each level of distribution adds its own markup to the price of the product.