Which type of price fixing involves retailers and wholesalers?

Vertical price fixing is the correct answer because it refers to an agreement among parties at different levels of the supply chain, such as manufacturers, wholesalers, and retailers, to set prices for goods or services. This type of price fixing occurs when a manufacturer imposes a minimum sale price that retailers must adhere to, thereby controlling the retail prices at which consumers can purchase products.

This practice can limit competition among retailers since they cannot set their own prices below the specified minimum, potentially leading to higher prices for consumers. Vertical price fixing is often scrutinized under antitrust laws because it can inhibit free market competition and consumer choice.

In contrast, horizontal price fixing involves agreements among competitors at the same level of the supply chain, such as between different retailers or manufacturers, to set prices collectively. Predatory pricing refers to the practice of setting prices extremely low to eliminate competition, and competitive pricing is a strategy where businesses set prices based on the prices charged by competitors. These concepts are distinct and do not specifically pertain to the relationship between retailers and wholesalers as vertical price fixing does.