A manufacturer distributes his products to retailers.However,the manufacturer requires that the retailers charge their customers a price set by the manufacturer.Anyone who does not charge these prices is terminated as a distributor.This action is:

Question

Quizplus · Accepted Answer

This action is an example of vertical price-fixing, which is an agreement between a manufacturer and its distributors or retailers to set the prices at which the products will be sold to the end consumers. This practice is generally considered illegal under U.S. antitrust laws, as it can reduce competition and lead to higher prices for consumers. However, there are some situations where vertical price-fixing may be legal, such as when the manufacturer is providing promotional services or when the price is necessary to maintain brand image and quality control.

A Manufacturer Distributes His Products to Retailers