Question

Manufacturers of national brands generally will also produce products under private labels. This is done because:

The Sherman Anti-Trust Act and other Federal laws require manufacturers to accept private label contracts in order to preserve industry competition and provide consumers with a better choice of products.

Manufacturers of national brands often cannot sell all their output under their own brands.

Most large retailers have backward integrated into manufacturing and use private labels as a way to expand the manufacturer s product mix.

Manufacturers find private labels to be more profitable than their own brands.

None of the above.

Answer 1

The correct answer is that the manufacturers of the national brands could not sell all the output under their own brands.

Step-by-step explanation:

Private label is defined as those products which are produced or manufactured through one company for the purpose of sale under another brand of the company.

So, the manufacturers of the national brands find difficult in selling the products manufactured by them under their own labels until they establish their place in the market. Therefore, in order to establish themselves first, they need to produce the products under the private labels, and sell them.