Question
Suppose that you want to buy a Lexus, and that you live in Houston. You have visited Lexus of Houston, and have bargained the dealer
Suppose that you want to buy a Lexus, and that you live in Houston. You have visited Lexus of Houston, and have bargained the dealer down to $52,000. Yand your friends go to Austin, and you notice Lexus of Austin. You stop in, and find this Lexus to be much more reasonably priced than Lexus of Houston was. You agree on a price of $48,000 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 Lexus of Austin. They have called Toyota (the manufacturer of Lexus) and have been told that, because you live in Houston, you can only buy a Lexus from Lexus of Houston. What type of vertical restriction is this and what antitrust law would cover this particular vertical restriction? Does it harm competition (yes or no)? Explain.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started