Mark Johnson, the manager of a discount consumer electronics store, was approached by the manufacturer's representative on behalf of a marketer of a popular and profitable line of storage racks. The manufacturer's representative implied that if Johnson didn't raise the retail prices for the storage racks to those paid by the marketer's non-discount customers, Johnson's supply of racks may be severely curtailed. The manufacturer's representative was guilty of attempting
A) horizontal price-fixing.
B) vertical price-fixing.
C) price discrimination.
D) predatory pricing.
E) bait and switch pricing.

Question

Quizplus · Accepted Answer

Vertical price-fixing occurs when a manufacturer or supplier tries to control the retail prices set by retailers, which is what the manufacturer's representative is attempting by implying that Johnson should raise prices.

Mark Johnson, the Manager of a Discount Consumer Electronics Store