Maximum resale prices across heterogeneous local markets

We study maximum resale prices across heterogeneous local markets that share a common target retail price. A sufficiently small retailer margin can make the ceiling bind across markets, allowing common terms to implement this price. Two-part tariffs instead require the marginal wholesale price to align the retailer’s unconstrained optimal price exactly with the target. If the ceiling already binds, changes in market structure require no contractual recalibration. Apple’s use of list prices as de facto maximum resale prices, combined with discounts from those prices for independent resellers, illustrates a setting in which the mechanism may be relevant.