Vertical contracts between manufacturers and retailers often aim to
A)Serve as a "signal" of the manufacturer's belief of the likely success of his product
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)​Serve as a "signal" of the manufacturer's belief of the likely success of his product
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 between manufacturers and retailers can serve multiple purposes. They can act as a signal of the manufacturer's confidence in their product, incentivize the retailer to take on the risk of introducing a new product, and reimburse the retailer for the costs associated with managing an extended inventory. Therefore, all of the choices (A), (B), and (C) are correct.

​Vertical Contracts Between Manufacturers and Retailers Often Aim to

Vertical Contracts Between Manufacturers and Retailers Often Aim to