Suppose a manufacturer sells a button-fastening machine

| November 24, 2016

uppose a manufacturer sells a button-fastening machine that saves a rm the labor cost

of $0.01 per button sewn on shirts. Suppose rms dier in the total number of buttons

they sew on. The manufacturer sells its machine with a requirements tie-in that requires

a purchaser to buy all its buttons from the manufacturer. Suppose the manufacturer can

install a meter that measures how many buttons each machine sews. If the manufacturer

can charge according to the use measured on the meter, is there any advantage to the tie-in?

Would it be sensible to outlaw tie-in sales but allow the manufacturer to charge according to the metered use?

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