Mark Johnson, the manager of a discount consumer electronics store, has been approached by the manufacturer of a popular and profitable line of compact disk storage racks regarding the retail price charged for the racks at Johnson's store.The manufacturer's representative has implied that if Johnson doesn't raise the retail prices for the storage racks to those charged by the manufacturer's non-discount customers, Johnson's supply of racks may be severely curtailed.The manufacturer is guilty of attempting
A)horizontal price-fixing.
B)resale price maintenance.
C)price discrimination.
D)predatory pricing.
E)bait and switch pricing.

Question

Quizplus · Accepted Answer

The manufacturer is attempting resale price maintenance by pressuring Johnson to raise the retail price for the storage racks to the same level as non-discount customers. This is illegal under antitrust laws as it interferes with the retailer's ability to set their own prices. The threat of cutting off supply also suggests an attempt to coerce Johnson's compliance.

Mark Johnson, the Manager of a Discount Consumer Electronics Store