A manufacturer 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.

Question

Quizplus · Accepted Answer

This scenario describes vertical price fixing, where the manufacturer sets the minimum resale price for the distributor and retailer, controlling the pricing structure down the supply chain.

A Manufacturer Agrees to Sell the Distributor 1,000 Boxes of 2-Quart