Quantity restrictions and the reseller's response to a temporary price reduction or an announced price increase

management science at the DeGroote School of Business at McMaster University, Canada Manufacturers and suppliers offer temporary reductions (or permanent increases) in the price charged to the resellers for a variety of reasons. The trade promotion may be offered to the reseller at a single point in time or over a finite time-span. In addition, in reselling situations, the end demand tends to be sensitive to selling price. It is commonly found …