In this article, the authors consider the economic consequences of State Oil v. Khan (1997) for franchising. After discussing the evolution of antitrust policy regarding maximum resale prices, they examine the economics behind franchisors’ desire to impose price ceilings on franchisees. The authors show that the most likely explanations for this practice imply that maximum resale prices enhance consumer welfare.
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Blair et al. (1999) studied this question.
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