The practice that forces a consumer to buy one product to obtain another is called?

The practice that forces a consumer to buy one product to obtain another is called?

• A. Exclusive dealing
• B. Tying contract
• C. Bundling
• D. Predatory pricing

Answer: (B)

Tying contracts happen when a seller makes the sale of one product conditional on the buyer also purchasing another product from the same seller. This forces the consumer to take the second product in order to obtain the first, which can give the seller more control over sales and can limit competition if the seller has power in the market for the first product. For example, if you must buy printer ink cartridges from the same company in order to purchase a printer, that’s a tying arrangement. It’s different from bundling, which simply sells two products together as a package (not strictly conditioning one purchase on the other). It’s also not about exclusive dealing, which restricts where a product can be sold, nor about pricing strategy like setting prices to drive out competitors.

Tying contracts happen when a seller makes the sale of one product conditional on the buyer also purchasing another product from the same seller. This forces the consumer to take the second product in order to obtain the first, which can give the seller more control over sales and can limit competition if the seller has power in the market for the first product.

For example, if you must buy printer ink cartridges from the same company in order to purchase a printer, that’s a tying arrangement. It’s different from bundling, which simply sells two products together as a package (not strictly conditioning one purchase on the other). It’s also not about exclusive dealing, which restricts where a product can be sold, nor about pricing strategy like setting prices to drive out competitors.