Asked by Ariana Lisner on Apr 29, 2024
Verified
Mountain Crest Inc. makes and distributes its branded products to authorized dealers. To prevent price-cutting by dealers in direct competition, the firm imposes limits on where each dealer can sell the products. This is
A) a territorial restriction.
B) a trade association.
C) smart marketing.
D) a price-fixing agreement.
Territorial Restriction
A limit imposed on the area or region where a product or service can be sold or provided.
Price-Cutting
The practice of reducing prices, often below the normal value, to attract customers or undermine competitors.
Direct Competition
The scenario where businesses offer the same or similar products or services to the same customer base, competing directly for market share.
- Ascertain authorized and prohibited activities according to the Sherman Act, the Clayton Act, and further antitrust statutes.
- Gain insight into the concepts of rule of reason and per se violations in antitrust legal frameworks.
Verified Answer
TS
Tushar Saini DahariaApr 30, 2024
Final Answer :
A
Explanation :
Territorial restrictions are limitations imposed by manufacturers or suppliers on the areas where dealers can sell their products. This is done to prevent direct competition among dealers, ensuring that each has a specific territory to operate in without encroachment from others selling the same product.
Learning Objectives
- Ascertain authorized and prohibited activities according to the Sherman Act, the Clayton Act, and further antitrust statutes.
- Gain insight into the concepts of rule of reason and per se violations in antitrust legal frameworks.