In the problem of double marginalization,the resulting price is higher than if
A)The manufacturer were to sell directly to the consumer
B)The manufacturer and the retailer were to merge
C)All of the above
D)None of the above

Question

​In the problem of double marginalization,the resulting price is higher than if
A)​The manufacturer were to sell directly to the consumer
B)The manufacturer and the retailer were to merge
C)All of the above
D)​None of the above

Quizplus · Accepted Answer

Double marginalization refers to a situation where both the manufacturer and the retailer add their own markup to the product's price, leading to a higher final price for the consumer than if the manufacturer sold directly to the consumer or if the manufacturer and retailer were to merge, eliminating one level of markup.

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

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