An Exporter Might Have to Forgo a Letter of Credit

question 34

Multiple Choice

An exporter might have to forgo a letter of credit when

• A) competing exporters also require letters of credit.
• B) the importer is facing stiff competition from other importers.
• C) the exporter is a dominant player in a noncompetitive market.
• D) the importer is in a strong bargaining position.
• E) he or she knows that the importer will default on payment.

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Definitions:

Fined

A penalty imposed for breaking a law, rule, or order.

Resale Price Maintenance

A practice where manufacturers and suppliers control or influence the price at which a product is sold by retailers, often to maintain price consistency or value.

Vertical Price-Fixing

An illegal agreement between parties at different levels of the same supply chain, such as manufacturers and retailers, to control prices.

Horizontal Price-Fixing

An agreement between competitors at the same level of the supply chain to set prices, restrict production, or reduce competition.