In the problem of double marginalization,the resulting price is ______than if the manufacturer and the retailer were to merge
A)Higher
B)Lower
C)The same
D)None of the above

Question

​In the problem of double marginalization,the resulting price is ______than if the manufacturer and the retailer were to merge
A)​Higher
B)Lower
C)The same
D)​None of the above

Quizplus · Accepted Answer

In the problem of double marginalization, both the manufacturer and the retailer add a markup to the price leading to a higher final price for the customer. If they were to merge, there would be a single markup leading to a lower final price. Therefore, the resulting price with double marginalization is higher than if the manufacturer and retailer were to merge.

​In the Problem of Double Marginalization,the Resulting Price Is ______Than

In the Problem of Double Marginalization,the Resulting Price Is ______Than