Asked by Britney Hicks on Jul 15, 2024
Verified
Explain the practice of tying and discuss why it is controversial.
Tying
A sales practice where one product is sold or leased only on the condition of buying another product or agreeing to terms that are not initially disclosed.
Controversial
Causing debate or disagreement, often due to differing opinions or values.
- Discern professional routines that could contravene competition statutes, including selling goods below cost, bundling requirements, and more.
Verified Answer
RQ
Randy QuesenberryJul 18, 2024
Final Answer :
Tying is the practice of bundling goods for sale. It is controversial because it is perceived as a tool for expanding the market power of firms by forcing consumers to purchase additional products. However, economists are skeptical that a buyer's willingness to pay increases just because two products are bundled together. In other words, simply bundling two products together doesn't necessarily add any value. It is more accurately believed to be a form of price discrimination.
Learning Objectives
- Discern professional routines that could contravene competition statutes, including selling goods below cost, bundling requirements, and more.
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