When two or more divisions mark up prices in excess of marginal cost,
A)double marginalization occurs.
B)two-part pricing occurs.
C)second-degree price discrimination occurs.
D)none of the statements associated with this question are correct.

Question

Quizplus · Accepted Answer

When two or more divisions mark up prices in excess of marginal cost, it leads to double marginalization, which occurs when each division adds its own profit margin, leading to higher final prices than necessary.

When Two or More Divisions Mark Up Prices in Excess