Final answer:
Manufacturers and retailers have a cooperative relationship since they depend on each other, but with technological advances and globalization, they increasingly compete against one another as well. This dynamic of cooperation and competition is influenced by the ease of global sourcing and the capacity to sell directly to consumers online. Government intervention may be necessary to balance the benefits of large-scale production against the loss of competition.
Step-by-step explanation:
The relationship between manufacturers and retailers is complex, often characterized as being both cooperative and competitive. Manufacturers need retailers to reach the end consumers, allowing for efficient distribution and sales. Retailers, conversely, depend on manufacturers to provide them with products that attract customers. This symbiosis creates an incentive for collaboration.
However, with advances in communications technologies and globalization, the boundaries are becoming blurred. Retailers are now able to source products globally, increasing competition for manufacturers. Similarly, manufacturers can sell directly to consumers via the internet, bypassing traditional retailers. This has amplified the competition between the two parties, as each can function in capacities typically reserved for the other.
Government policymakers play a role in this dynamic by determining how much to intervene. The balance between the benefits of large-scale production and maintaining healthy competition is critical. In situations like two factory owners finding profitability in coordination, the line between cooperation and competition becomes even thinner, creating potential regulatory challenges.