Final Answer:
Vertical price fixing might occur between manufacturers and retailers.
Step-by-step explanation:
Vertical price fixing refers to a situation where entities at different levels of the supply chain collaborate to set prices. In the case of manufacturers and retailers, this collusion involves the parties agreeing on the prices at which the manufacturer's products will be sold to end consumers. This can be detrimental to fair competition as it limits the ability of retailers to independently determine prices based on market forces.
Manufacturers may engage in vertical price fixing to maintain control over their brand image, ensure consistent pricing, or eliminate price competition among retailers. By dictating the resale prices, manufacturers can influence consumer perceptions of their products and protect profit margins. However, this practice is often subject to antitrust laws, as it can lead to reduced competition and higher prices for consumers. Antitrust authorities closely monitor such agreements to prevent anti-competitive behavior and protect the interests of consumers.