Vertical contracts between manufacturers and retailers often aim to
A)Incentivize the retailers to undertake costly activities,which they otherwise may not realize the full benefits of on their own
B)Reward the retailer for undertaking the risk inherent in introducing a new product
C)Reimburse the retailer for the cost of managing an extended inventory
D)All of the above

Question

​Vertical contracts between manufacturers and retailers often aim to
A)​Incentivize the retailers to undertake costly activities,which they otherwise may not realize the full benefits of on their own
B)Reward the retailer for undertaking the risk inherent in introducing a new product
C)Reimburse the retailer for the cost of managing an extended inventory
D)​All of the above

Quizplus · Accepted Answer

Vertical contracts can serve multiple purposes such as incentivizing retailers to undertake costly activities that they may not have undertaken on their own, rewarding retailers for taking risks in introducing new products, and compensating them for the costs of managing an extended inventory. Therefore, option D covers all of the above points.

​Vertical Contracts Between Manufacturers and Retailers Often Aim to

Vertical Contracts Between Manufacturers and Retailers Often Aim to