The Manufacturer of South Face Sells Jackets to Retail Stores

question 153

Multiple Choice

The manufacturer of South Face sells jackets to retail stores for $105 each, and it requires the retail stores to charge customers $135 per jacket. Any retailer that charges less than $135 would violate its contract with South Face. What do economists call this business practice?

• A)Predatory pricing
• B)Resale price maintenance
• C)Tying
• D)Leverage

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Definitions:

Restrictive Covenant

A clause in a contract that limits certain actions of the parties involved, often used in employment contracts and real estate agreements to restrict competition or the use of property.

Specific Performance

A legal remedy in contract disputes requiring the party who breached the contract to perform their obligations as originally agreed, instead of simply paying damages.

Adverse Possession

A legal principle allowing a person to claim ownership of land or property through continuous occupation over a certain period without the permission of the original owner.

Title

The lawful entitlement to possess, hold, or utilize property.