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)Serve as a "signal" of the manufacturer's belief of the likely success of his 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)Serve as a "signal" of the manufacturer's belief of the likely success of his product
C)Reimburse the retailer for the cost of managing an extended inventory
D)​All of the above

Quizplus · Accepted Answer

Vertical contracts serve multiple purposes, including incentivizing retailers to undertake activities that benefit the manufacturer's product, signalling the manufacturer's confidence in the product, and reimbursing the retailer for additional costs related to inventory management. Therefore, all of the above options are correct.

​Vertical Contracts Between Manufacturers and Retailers Often Aim to

Vertical Contracts Between Manufacturers and Retailers Often Aim to