Complete the following table by indicating whether each of the scenarios describes the concept of tying, resale price maintenance, or predatory
pricing.
Scenario
Snackyville sells a wide variety of snacks to retail grocery stores. Snackyville recently released two new
snacks: a popular trail mix and a much less popular granola bar. Snackyville requires grocery stores to
buy 15 cases of the granola bar for every 140 cases of the trail mix ordered.
Rhythm is a firm that produces mp3 players. Suppose Rhythm sells its mp3 players to retail stores for
$159 each and requires those retailers to charge customers at least $179 for each mp3 player.
Coolaire is the only firm producing refrigerators. It costs $1,000 to produce a refrigerator, and Coolaire
sells each refrigerator for $1,200. After Chillbox, a new firm with the same costs as Coolaire, enters the
market for refrigerators, Coolaire starts selling its refrigerators for a price of $550.
Resale Price Predatory
Pricing
Tying Maintenance
True or False: By bundling the two snacks together, Snackyville can force grocery stores to pay more than they would be willing to pay when
purchasing the snacks separately.
True
False