Asked by Julia Little on Jun 27, 2024
Verified
Briefly describe the two arguments that economists make to defend the practice of resale price maintenance.
Resale Price Maintenance
A practice whereby manufacturers and distributors agree on the minimum prices at which retailers can sell their products.
Economists
Experts who focus on how goods and services are created, distributed, and used by individuals.
- Understand the economic rationale behind and the controversies surrounding resale price maintenance.
Verified Answer
UZ
usama zulfiquarJul 02, 2024
Final Answer :
First, economists do not agree that resale price maintenance reduces competition. Second, economists argue that the practice has the legitimate goal to provide good customer service, which could be considered a public good and thus subject to the free-rider problem.
Learning Objectives
- Understand the economic rationale behind and the controversies surrounding resale price maintenance.
Related questions
Briefly Describe the Practice of Resale Price Maintenance
Explain the Practice of Resale Price Maintenance and Discuss Why ...
The Manufacturer of South Face Sells Jackets to Retail Stores ...
Resale Price Maintenance Prevents Retailers from Competing on Price
A Retailer Marks Up All Cosmetic Products to Allow for ...