The Prerequisites and Effects of Resale Price Maintenance

Abstract

Present law permits the makers of most identifiable products to fix the prices at which these products may be resold (or below which they may not be resold) in most states in the United States. This is permissible on goods which are in free and open competition with other goods of the same general class, and no agreements among competing sellers at any level are sanctioned. These "safeguards" to competition provide the basis for the contention that the fair-trade laws do not eliminate competition or raise prices. The opposing view is that competition is as important in distribution as in manufacturing, and that dealer competition is inevitably eliminated. Consumers are thus limited in the range of choices they may exercise with respect to service facilities, convenience, or price in the sale of price-maintenance products.