Final answer:
The principal's duty that prevents Beta Distribution Company from competing with Cathy in her exclusive territory is the duty of cooperation. This duty supports the agent's business efforts and respects the assigned exclusive areas.
Step-by-step explanation:
The question asks which duty ensures that Beta Distribution Company cannot compete with its agent Cathy in the exclusive territory granted to her. The correct answer is d. cooperation. This duty requires the principal (Beta Distribution Company) to not interfere with the agent's business and to support the agent's efforts in selling the products. In the context of exclusive territories, this would mean that Beta is expected to refrain from competing with Cathy within her designated area, allowing her to operate without internal competition from the principal itself.
Exclusive dealing agreements can be both legal and illegal, depending on their impact on competition. When they're used to foster competition among different dealers, such as the case with automotive companies and their respective dealerships, they are typically viewed as legal. However, if such agreements limit competition by allowing a single retailer to have exclusive rights that would otherwise be distributed among several competitors, it can be considered anticompetitive.