RETAIL TRADE: How to Raise Prices

Does Fair Trade bring higher or lower prices? Last week, after a year-long study of the question, University of Chicago Economist Ward S. Bowman Jr. reported that Fair Trade tends to raise retail prices. As part of his research, Bowman picked a typical product, toothpaste, and 'checked retail prices all over the nation. Conclusion: in the 40 states that have Fair Trade laws, toothpaste costs 2% more than in free-trading states.

Some manufacturers, says Bowman, may find price-fixing necessary in special cases, e.g., to keep service dealers in business, to protect an investment in technical instruction to dealers. But most...

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