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
Identify the aspect of consumer law breached
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Answer
In this scenario, X-Data Business Machines Ltd has implemented a strict pricing policy, insisting that distributors sell its computer package only at the advertised price. This practice relates directly to the concept of 'resale price maintenance.'
Resale price maintenance is an agreement between a supplier and distributors to set a minimum price at which products must be sold, preventing retailers from reducing prices. This can limit competition and restrict the ability of retailers to set their own prices, which is often scrutinized under consumer protection laws.
Therefore, the correct answer is (C) Resale price maintenance.