Hewlett-Packard (HP), Toshiba, Sony, and other computer manufacturers sell both directly and through Internet stores. Visit www.cnet.com and search for the term notebook. The site will return laptop computers from several manufacturers. If you look at notebooks from HP, Toshiba, or Sony, you will see that they must be purchased from Internet vendors. (Click Check Prices to see vendor sources.) In contrast, Dell computers can be purchased only from Dell, as you will see when you check for the price for one of its computers.

In order to use an intermediary, HP and others must sell their computers to the supplier at a price below the consumer's price; otherwise the supplier has no incentive to sell the product. But those vendors cannot offer the supplier's price to the public without losing its suppliers. Does this situation mean that Dell computers will be cheaper than those offered by competitors? Why or why not?

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