The difference between horizontal price fixing and vertical price fixing is based on ________.
A) whether the channel members are at the same level
B) the legality of the resulting prices
C) the effect on final selling prices
D) whether collusion is involved

Question

Quizplus · Accepted Answer

Horizontal price fixing occurs when firms at the same level of distribution collude to agree on a fixed price, whereas vertical price fixing occurs when firms at different levels of distribution (e.g., manufacturers and retailers) collude to set prices. Therefore, the difference between them is based on whether channel members are at the same level (A). The legality and effect on final selling prices may be similar between the two. The involvement of collusion may occur in both horizontal and vertical price fixing.

The Difference Between Horizontal Price Fixing and Vertical Price Fixing