The Shiny Watch company,a manufacturer of expensive watches,requires all of its retailers to sell its watches for a specific price.Which of the following statements are true?
i.The Shiny Watch company is engaged in predatory pricing.
ii.The Shiny Watch company is definitely violating the law
iii.The Shiny Watch company creates an efficient outcome it its retailers provide an efficient level of service.

Question

Quizplus · Accepted Answer

The practice described by the Shiny Watch company is not predatory pricing, which involves setting prices low to eliminate competition, nor is it definitively illegal, as manufacturers can suggest retail prices under certain conditions. However, if the policy ensures that retailers provide an efficient level of service, it can lead to an efficient outcome by maintaining brand value and customer satisfaction.

The Shiny Watch Company,a Manufacturer of Expensive Watches,requires All of Its