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)Reward the retailer for undertaking the risk inherent in introducing a new product
C)Serve as a "signal" of the manufacturer's belief of the likely success of his product
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)Reward the retailer for undertaking the risk inherent in introducing a new product
C)Serve as a "signal" of the manufacturer's belief of the likely success of his product
D)​All of the above

Quizplus · Accepted Answer

Vertical contracts between manufacturers and retailers often serve multiple purposes, including incentivizing retailers to undertake costly activities that benefit the manufacturer's product, rewarding the retailer for introducing a new product and taking on the associated risk, and signaling the manufacturer's confidence in the product's success. Therefore, option D is correct as it includes all the above reasons.

​Vertical Contracts Between Manufacturers and Retailers Often Aim to

Vertical Contracts Between Manufacturers and Retailers Often Aim to