The manufacturer of Bozz Radios sells radios to retail stores for $500 each,and it requires the retail stores to charge customers $550 per radio.Any retailer that charges less than $550 would violate its contract with Bozz Radios.What do economists call this business practice?

Question

Quizplus · Accepted Answer

This business practice is called resale price maintenance, where the manufacturer sets a minimum price that retailers cannot go below. This is often done to maintain the brand image and keep prices consistent across different retailers.

The Manufacturer of Bozz Radios Sells Radios to Retail Stores