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:

Question

Quizplus · Accepted Answer

Vertical price fixing involves agreements between different levels of the same supply chain, such as manufacturers, distributors, and retailers, to set prices at certain levels. In this scenario, the manufacturer is dictating the resale price to the distributor and the retailer, which is an example of vertical price fixing.

The Manufacturer of Rubberware Agrees to Sell the Distributor 1,000