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3. Vertical Issues (4 points each) Suppose that you want to buy a Lexus, and that you live in Austin. You have visited Lexus of
3. Vertical Issues (4 points each) Suppose that you want to buy a Lexus, and that you live in Austin. You have visited Lexus of Austin, and have bargained the dealer down to $52,000. Over the weekend, you and your family go to San Antonio to see friends, and you notice North Park Lexus of San Antonio. You stop in, and find North Park Lexus of San Antonio to be much more reasonably priced than Lexus of Austin was. You agree on a price of $50,000 for the same car. You sign papers, and agree to pick up the car on Thursday. On Tuesday, you get an apologetic phone call from North Park Lexus. They have called Toyota (the manufacturer of Lexus) and have been told that, because you live in Austin, you can only buy a Lexus from Lexus of Austin. a. What type of vertical restriction is this? b. What antitrust law would cover this particular vertical restriction? c. Does it harm competition (yes or no)? Explain. d. What is the difference between an Exclusive Territories restriction and an Exclusive Dealing restriction? e. Is resale price maintenance per se illegal? Cite an antitrust case that has already been covered in class to support your
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