X-Data Business Machines Ltd has released an advertising campaign that states the sale price of one of its computer packages - HSC - SSCE Business Studies - Question 2 - 2004 - Paper 1
Question 2
X-Data Business Machines Ltd has released an advertising campaign that states the sale price of one of its computer packages. It has insisted that distributors of th... show full transcript
Worked Solution & Example Answer:X-Data Business Machines Ltd has released an advertising campaign that states the sale price of one of its computer packages - HSC - SSCE Business Studies - Question 2 - 2004 - Paper 1
Step 1
Resale price maintenance
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Answer
The issue at hand is the insistence of X-Data Business Machines that distributors sell the computer package only at the advertised price. This practice is known as resale price maintenance (RPM). RPM occurs when a manufacturer sets a minimum price that retailers must adhere to when selling a product. This can be seen as a breach of consumer law, as it restricts the distributors' ability to set their own prices and potentially harms competition in the market. Thus, the correct answer is (C) Resale price maintenance.