Abbrochment - Definition & Meaning
What is Abbrochment?
Abbrochment is a legal term which means forestalling of a market or fair. An abbrochment happens when a person monopolizes a market by buying a product wholesale or bulk for the purpose of selling that product retail as the only vendor of the product. Buying up goods at wholesale to control the supply and then resell at much higher resale prices.
For example, if A is currently not on the market, and I purchase all of A to become the only retail provider of A in the marketplace.
The act of forestalling a market by buying up at wholesale the merchandise intended to be sold there, for the purpose of selling it at retail
This is monopoly where there can be unmet demands and price will be above the normal price. This will also lead to arbitrage where the products from one market will be transferred to another market and sold. These will lead to inefficiencies in the market.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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