Final answer:
Attempts by manufacturers to control retail prices are known as vertical price fixing, which is a practice that can be regulated by government-imposed price controls such as price ceilings and price floors. So, the correct option is B. vertical price fixing.
Step-by-step explanation:
Attempts by manufacturers to control the ultimate retail prices are known as vertical price fixing. This practice is often scrutinized and regulated by governments through the enactment of price controls. Price controls include both price ceilings, which prevent prices from rising above a certain level, and price floors, which prevent prices from falling below a set minimum.
The concept of price fixing directly relates to how manufacturers and retailers set the prices of their goods and services. Government intervention with price controls is intended to regulate the economy and prevent unfair pricing practices that can negatively impact consumers and the overall market equilibrium. Price ceilings and price floors are two tools used by governments to implement such controls. In the context of the provided options, vertical price fixing involves manufacturers attempting to influence or dictate the price at which retailers can sell their products, establishing control over retail prices that can extend along the supply chain. This is distinguished from other forms of price fixing, such as horizontal price fixing, where competitors agree on pricing.
It is important to note that price controls can have counterproductive effects if not managed properly, as they can lead to market imbalances, where supply and demand no longer dictate prices. This scenario is analogous to the proverb about the risks of killing the messenger; attempting to control natural market forces can lead to unintended consequences. In conclusion, the correct option that describes attempts by manufacturers to control the ultimate retail prices is 'B. vertical price fixing'.