Asked by Olivia Egede on May 27, 2024
Verified
The manufacturer of Rubberware agrees to sell the distributor 1,000 boxes of 2-quart bowls only if he agrees to resell to the retailer at cost plus $1.10 per bowl and the retailer must agree to sell at no less than his cost plus. 50 per bowl. This is:
A) horizontal price fixing.
B) vertical price fixing.
C) vertical market allocation.
D) a group boycott.
Price Fixing
An unlawful agreement between competitors to establish, raise, or maintain prices at a certain level, often aimed at maximizing profits by eliminating competition.
Distributor
An intermediary entity that buys products from manufacturers and sells them to retailers or directly to consumers.
- Ascertain the differences between dissimilar antitrust transgressions, including horizontal and vertical bans, monopoly control, and tie-in arrangements.
- Understand the concepts and legal implications of price fixing, market allocations, and exclusive dealing arrangements.
Verified Answer
KN
Kevina NowlinJun 01, 2024
Final Answer :
B
Explanation :
This is an example of vertical price fixing because it involves an agreement between different levels of the same supply chain (manufacturer to distributor to retailer) to adhere to specific pricing strategies. Horizontal price fixing would involve competitors at the same level agreeing on prices, which is not the case here. Vertical market allocation and group boycotts involve different practices not described in the scenario.
Learning Objectives
- Ascertain the differences between dissimilar antitrust transgressions, including horizontal and vertical bans, monopoly control, and tie-in arrangements.
- Understand the concepts and legal implications of price fixing, market allocations, and exclusive dealing arrangements.