The problem of "double marginalization" is
A)The retail price being too high due to an inclusion of both manufacturer and retailer markup
B)The retail price being too low due to an exclusion of both manufacturer and retailer markup
C)The retail price being too high due to an exclusion of manufacturer markup
D)The retail price being too low due to an exclusion of retailer markup

Question

​The problem of "double marginalization" is
A)​The retail price being too high due to an inclusion of both manufacturer and retailer markup
B)The retail price being too low due to an exclusion of both manufacturer and retailer markup
C)The retail price being too high due to an exclusion of manufacturer markup
D)​The retail price being too low due to an exclusion of retailer markup

Quizplus · Accepted Answer

Double marginalization refers to a situation where both the manufacturer and the retailer add markups to a product, leading to a higher retail price than necessary. This can result in reduced consumer demand, lower profits for both the manufacturer and retailer, and can also create a barrier to entry for new competitors.

​The Problem of "Double Marginalization" Is

The Problem of "Double Marginalization" Is