To avoid the problem of double marginalization:
A. firms should engage in commodity bundling, unless it is possible to engage in either first-or second-degree price discrimination.
B. transfer prices must be set that maximize the overall value of the firm rather than the profits of the upstream division.
C. firms should put more emphasis on vertical integration.
D. firms should engage in two-part pricing.
Answer: B
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In a command economy, resources are publicly owned by government and economic activity is coordinated through a central government planning authority
a. True b. False Indicate whether the statement is true or false
Suppose that there is a renewed interest in eating caviar at the same time that the supply of Russian caviar shrinks. What would be the most likely effect of these events on the price and quantity of caviar sold?
A. Price fell and the effect on the quantity of caviar sold is ambiguous. B. Price fell and quantity sold rise. C. Price rose and the effect on the quantity of caviar sold is ambiguous. D. Price rose and quantity sold fell.
State the law of supply and explain it.
What will be an ideal response?
Refer to Figure 24-4. Given the economy is at point A in year 1, what will happen to the price level in year 2?
A) It will remain constant. B) It will fall. C) It will rise. D) not enough information to answer the question