ACCOUNTING FOR SOCIAL COSTS ASSOCIATED WITH RESALE PRICE MAINTENANCE |
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| Authors: | CINDI FLESHMAN JONATHAN WILLNER |
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| Institution: | 10507 White Oak Canyon Rd., Oklahoma City, OK 73162. Phone 405-613-8936, E-mail;Professor of Economics, Meinders School of Business, Oklahoma City University, 2501 N. Blackwelder, Oklahoma City, OK 73106-1493. Phone 405-521-5133, E-mail |
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| Abstract: | Resale price maintenance (RPM) can provide a positive or negative effect on social welfare. The evaluation depends on many factors, such as whether a high-demand or low-demand state exists, storage/holding costs, and disposal costs. A number of articles addressing the welfare effects of RPM conclude they enhance social welfare. Disposal costs for manufactured products are real and increasingly accounted for in firm costs, and are an essential issue in environmental economics. This article examines the case for RPM with disposal costs. When not incorporated into firm profits, RPM may be welfare reducing. (JEL D42 , D62 , D81 ) |
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