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Buying Back Merchandise from Discount Retailers

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In 1981, a representative of the manufacturer along with the regional distributor of Head skis tried to buy the entire stock of their own skis being offered for sale at very low prices by a chain of discount stores. At one store the purchasers immeditaley went outside and broke all the skis in the store parking lot and dumped them in the nearby dumpster. Can you offer an explanation for this?

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Solution Summary

Consumers' value is tested in this case. An explanation is offered.

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For this explanation to matter, Head Skis would have a brand name which means that they would not be opperating in a perfectly competitive market. That is, how much they produce has at least some impact on the price because their product is differentiated from that of its competitors. The low cost chain ...

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