Final answer:
The statement is true; under an exclusive-dealing contract, a seller normally grants a buyer exclusive rights in a designated territory, potentially legal if it encourages dealer competition but possibly illegal if it limits overall competition.
Step-by-step explanation:
Under an exclusive-dealing contract, a seller promises a buyer a certain territory in which the buyer will have no direct competition. The statement in the student's question is True. Exclusive dealing arrangements can vary, but they often involve a supplier agreeing to provide a distributor the sole rights to sell their product in a certain area. This can be legal if the intent is to encourage competition amongst dealers, such as the case with automobile manufacturers like Ford or General Motors, which sell their products only through their respective dealers.
However, it's important to note that exclusive contracts can sometimes limit competition. If a single large retailer were granted exclusive rights to distribute multiple products such as televisions, computers, and audio equipment from several manufacturers, it could potentially have an anticompetitive effect on other retailers, limiting the choices available to consumers and possibly leading to higher prices.