A monopolistic producer uses a dealer network, in which it limits the number of dealers and restricts them to exclusive territories, to sell its product in another country. Some importers buy the product in the other country and sell it in the United States. Such imported products are said to be sold on the gray market. Explain why the manufacturer might not want to prevent such gray market sales.
A monopolistic producer uses a dealer network, in which it limits
the number of dealers and restricts them to exclusive territories, to sell its product in another country. Some importers buy the product in the other country and sell it in the United States. Such imported products are said to be sold on the gray market. Explain why the manufacturer might not want to prevent such gray market sales.
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