Rhythm is a firm that produces MP3 players/ Suppose Rhythm sells its MP3 players to retail stores...

Question:

Rhythm is a firm that produces MP3 players/ Suppose Rhythm sells its MP3 players to retail stores for $400 each and required those retailers to charge customers at least $440 for each player.

Rhythm is engaged in:

a. Tying

b. Resale price maintenance.

Retail Price Maintenance (RPM):

Retail price maintenance is an agreement between the manufactures and the distributors or retailers whereby they agree on the minimum (price ceiling) or the maximum (price floor) price that the retailer should charge the final consumers.

Answer and Explanation:

The correct answer is: b. Resale price maintenance.


Rhythm sells its MP3 players to its retail stores for $400 and requires that the stores sell...

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Merchandising Business: Definition & Examples

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Chapter 1 / Lesson 8
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