Question

What is re-sale price maintenance? Briefly discuss why it has the potential to be both pro and anti-competitive.

Answer 1

Resale pricr maintenance is where manufacturer and distributor agree that selling price of manufacturer will be at certain price or above price floor or below celling by the distributor.this is like a agreement.if there will be breach of contact then manufacture may stop for doing business with them.

It has potential to be both pro and anticompetitve because in procompetitive its aim's is conducting business by way of promoting consumer welfare .while anti-competitive reduce consumer welfare .in pro competitive conduct sellers aim is to reducing market price of the good and increasing the product quality for the benefit of consumer.while in anticompetitive conduct is just opposite of pro competitive behaviour because in this way prices will be raised by seller and quality of product is also lower.