AutoCorp is a dealership that has a contract that prevents the main company from opening another dealership within a 30 mile radius. This is an example of:
A) company free-riding on AutoCorp's specific asset: local monopoly.
B) AutoCorp free-riding on the company's reputation.
C) exclusive territories.
D) double markups from locational advantages.

Question

Quizplus · Accepted Answer

The dealership's contract preventing the main company from opening another dealership within a 30 mile radius is an example of exclusive territories, which is a common practice in franchising and distribution agreements.

AutoCorp Is a Dealership That Has a Contract That Prevents