All of the Following Are True If Both the Upstream

question 45

Multiple Choice

All of the following are true if both the upstream and downstream firm have market power except which one?

• A)This situation is referred to as double marginalization.
• B)Both the upstream firm and the downstream firm set a price that exceeds their respective marginal costs.
• C)If the two firms were to merge, the combined firm would earn the same profit than if they did not merge.
• D)This situation is referred to as a successive monopoly.

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