When Selecting the Degree of Market Exposure for a Firm's

question 113

Multiple Choice

When selecting the degree of market exposure for a firm's products, it's important to remember that:

• A) vertical arrangements between producers and intermediaries which limit sales by customer or territory are definitely illegal.
• B) the Federal Trade Commission prohibits exclusive distribution.
• C) vertical arrangements between producers and intermediaries which limit sales by customer or territory may be legal according to a recent Supreme Court ruling.
• D) horizontal arrangements among competing producers or intermediaries which limit sales by customer or territory are generally considered legal.
• E) None of these alternatives is correct.

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Definitions:

Noncompetitive

Refers to a situation or environment where there is little to no competition between businesses or individuals.

Exclusive Territory

A business agreement in which a franchisor grants a franchisee the sole right to sell or distribute products or services in a specified geographic area.

Cash and Carry

A type of trade where goods are paid for in full at the time of purchase and taken away by the buyer immediately.

Wholesalers

Businesses that sell goods in large quantities to retailers, other merchants, or industrial, commercial, and institutional users.