When a manufacturer sells a product to a middleman only under the condition that the middleman buys another (possibly unwanted) product from the producer, the two parties have become involved in a(n):
A) exclusive dealing agreement.
B) exclusive-territory policy.
C) intensive distribution strategy.
D) tying contract.
E) horizontal conflict.

Question

Quizplus · Accepted Answer

This is known as a tying contract, where the sale of one product (the tying product) is conditioned on the purchase of a second, distinct product (the tied product). This practice can be controversial and is often scrutinized under competition law.

When a Manufacturer Sells a Product to a Middleman Only