define maximim retail price?

Answer 1

A manufacturer might establish and maintain a minimum or maximum retail price. The maximum retail price is the price above which retailers are prohibited from adopting when selling the product to consumers. The most compelling explanation for a manufacturer restraining retailers from charging high retail prices is one that couples consumers’ interests with those of the manufacturer. If retailers who distribute the manufacturer’s product have substantial market power, the manufacturer cannot rely on competition to discipline retail prices. The imposition of price ceilings keeps such retailers from raising retail prices and reducing quantities sold at the manufacturer’s expense. Putting a cap on retail prices also prevents harm to consumers.