Independent distributors of soda can free ride on the name brand of the producing company. Two solutions to this problem are:
A) joint asset ownership and long term contracts.
B) open market transactions and free distribution of production secrets.
C) linked advertising and exclusive territories.
D) open market transactions and exclusive territories.

Question

Quizplus · Accepted Answer

Linked advertising and exclusive territories would allow the producing company to control the distribution and promotion of their brand, while also providing a guaranteed market for their independent distributors. This would reduce the incentive for free riding and ensure the integrity and consistency of the brand across different locations. Joint asset ownership and long term contracts could also work, but they may be more complex and difficult to negotiate and enforce. Open market transactions and free distribution of production secrets would likely result in more competition and fragmentation, which could weaken the brand and make it difficult for consumers to recognize and trust it.

Independent Distributors of Soda Can Free Ride on the Name