Vertical contracts between manufacturers and retailers often aim to
A)Prevent the manufacturers from upstream price discrimination
B)Reward the manufacturer 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)​Prevent the manufacturers from upstream price discrimination
B)Reward the manufacturer 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 can serve as a signal of the manufacturer's confidence in the product's success, aligning incentives between manufacturers and retailers.

​Vertical Contracts Between Manufacturers and Retailers Often Aim to

Vertical Contracts Between Manufacturers and Retailers Often Aim to