Successive monopolies face the problem of:
A)double marginalization.
B)volumetric interdependence.
C)opportunism.
D)predatory pricing.

Question

Quizplus · Accepted Answer

Successive monopolies refer to a situation where a company gains a monopoly in a specific market, and subsequently acquires a monopoly in another market linked to the original market. In such a scenario, the company faces the problem of double marginalization, where it charges a markup in both markets, leading to higher prices for consumers and lower quantities demanded. This problem can be solved by integrating the two markets, which can reduce the overall markup and lead to more efficient outcomes.

Successive Monopolies Face the Problem Of