As a legitimate means of discouraging the problem of free riders,what do economists suggest using
A)tying
B)resale price maintenance
C)marginal cost pricing
D)cost plus pricing

Question

Quizplus · Accepted Answer

Resale price maintenance is a pricing strategy that involves setting the minimum price at which a product can be sold by a retailer. This ensures that retailers cannot undercut each other and sell the product for less than what the manufacturer wants, thus reducing the incentive for free riders. This strategy is commonly used in the sale of luxury goods, where the manufacturer wants to maintain the exclusivity of the product and avoid it being devalued by too much discounting. Therefore, economists suggest using resale price maintenance as a legitimate means of discouraging free riders.

As a Legitimate Means of Discouraging the Problem of Free