Question 1

Price discrimination refers to

Accepted Answer

Price discrimination refers to the practice of charging different prices to different buyers for goods of like grade and quality. This is commonly seen in industries such as airline tickets, where prices may vary based on factors such as time of purchase, how far in advance the ticket is bought, and the purchaser's location.

Question 2

Price deals that mislead consumers fall into the category of

Accepted Answer

Price deals that mislead consumers fall into the category of deceptive pricing, as they involve tactics that are intended to misrepresent or deceive consumers about the true price or value of a product or service. Predatory pricing involves setting prices low with the intention of driving competitors out of business, price discrimination involves charging different prices to different customers for the same product, caveat emptor refers to the principle of "let the buyer beware," and resale price maintenance involves setting minimum sale prices for retailers.

Question 3

Vertical price fixing refers to

Accepted Answer

The answer of Vertical price fixing refers to
...

Question 4

Deceptive pricing practices are outlawed by legislation and enforced by which federal agency?

Accepted Answer

Deceptive pricing practices are enforced by the Federal Trade Commission (FTC) through the Federal Trade Commission Act, which prohibits unfair or deceptive acts or practices in commerce. The FTC also has the authority to investigate and take legal action against companies that engage in deceptive pricing.

Question 5

Resale price maintenance was declared illegal in 1975 under the

Accepted Answer

The answer of Resale price maintenance was declared illegal in...

Question 6

The Robinson-Patman Act allows for price differentials to different customers under several conditions. Which of the following practices would be permitted?

Accepted Answer

Price differentials are allowed under the Robinson-Patman Act when they result from changing market conditions, avoiding obsolescence of seasonal merchandise, including perishables, or closing out sales.

Question 7

Controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price is called

Accepted Answer

Vertical price fixing is the controlling of agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price. This is a violation of antitrust laws as it restrains trade and limits competition.

Question 8

When a seller represents a price as reduced, the item must have been offered in good faith at a higher price for a substantial previous period. Former price comparisons are deceptive if

Accepted Answer

The high price being set solely to establish a reference for a price reduction is deceptive and not in good faith.

Question 9

The practice of offering a bargain that is conditional on the purchase of other products may exist when a buyer is offered the "1-Cent Sales," the "Buy 1, Get 1 Free," or the "Get 2 for the Price of 1" deal. Such pricing is legal only if

Accepted Answer

This is the only option listed that directly addresses the legality of conditional bargains. Specifically, it states that the first items must be sold at the regular price, rather than a price that has been inflated specifically for the offer. This helps to ensure that consumers aren't being misled or deceived by the offer. The other options may be important factors to consider in general business practices, but they are not necessarily relevant to the legality of conditional bargains.

Question 10

The Robinson-Patman Act covers promotional allowances as well as discounts. To legally offer promotional allowances to buyers, the seller must do so on __________ basis to all buyers distributing the seller's products.

Accepted Answer

The Robinson-Patman Act requires that promotional allowances be offered on a proportionally equal basis to all buyers to prevent unfair competition and price discrimination.

Question 11

Advertising such as "Retail Value $100, Our Price $85" is deceptive if

Accepted Answer

The advertising is deceptive if a verified and substantial number of stores in the market area do not price the item at $100, as it implies that the $100 is a typical or standard price for the item in the market.

Question 12

Mark Johnson, the manager of a discount consumer electronics store, was approached by the manufacturer's representative on behalf of a marketer of a popular and profitable line of DVD storage racks. The manufacturer's representative implied that if Johnson doesn't raise the retail prices for the storage racks to those paid by the marketer's nondiscount customers, Johnson's supply of racks may be severely curtailed. The manufacturer's representative is guilty of attempting

Accepted Answer

The manufacturer's representative is attempting to enforce resale price maintenance by pressuring Johnson to raise his retail prices to match those paid by the nondiscount customers of the marketer. This violates antitrust laws that prohibit manufacturers from dictating the prices at which their products are sold by retailers.

Question 13

The Robinson-Patman Act allows for price differentials to different customers under several conditions. Which of the following practices would be permitted?

Accepted Answer

The answer of The Robinson-Patman Act allows for price differentials...

Question 14

The Robinson-Patman Act allows for price differentials to different customers under several conditions. Which of the following practices would be permitted?

Accepted Answer

The Robinson-Patman Act allows for price differentials when the differences in price do not exceed the differences in the cost of manufacture, sale, or delivery resulting from different methods or quantities in which such goods are sold or delivered to buyers. Therefore, choice A is permitted under the act. Choices B, C, and D are not permitted as they are based on discriminatory factors such as family relationships, religious affiliation, or buyer identity. Choice E may also not be permitted as it depends on the specific circumstances of the goods being sold, and whether or not the refurbished goods meet the standards of the original product.

Question 15

Two or more competitors explicitly or implicitly setting prices is referred to as

Accepted Answer

Horizontal price fixing occurs when two or more competitors agree to set prices, usually to eliminate competition and increase profits. This is illegal under antitrust laws in most countries, including the United States.

Question 16

Amazon customers complained when they discovered that the online retailer was offering different customers different prices for the same product. Company officials admitted that the company was trying to see how much it could charge for an item before buyers balked. No matter what the reasoning behind it, Amazon.com was using

Accepted Answer

Price discrimination occurs when a company sells the same product to different customers at different prices, which is what Amazon was doing in this scenario.

Question 17

The practice of charging different prices to different buyers for goods of like grade and quality is referred to as

Accepted Answer

Price discrimination is the practice of charging different prices to different buyers for goods of like grade and quality. This can be illegal if it harms competition or creates a monopoly, but it can be legal under certain circumstances such as offering discounts to certain groups or customers based on factors like age, income, or location. Horizontal price fixing involves collusion among competitors to set prices, resale price maintenance involves setting a minimum price for resellers, predatory pricing involves setting prices below cost to drive competitors out of business, and bait and switch pricing involves advertising a low price to lure customers into the store, only to switch them to a higher-priced item once they arrive.

Question 18

Vertical price fixing involves controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price. This practice is also called

Accepted Answer

Resale price maintenance is the practice of manufacturers setting a minimum price that retailers or distributors must charge when reselling their products. Vertical price fixing is a form of resale price maintenance whereby the manufacturer or supplier dictates a minimum retail price that the retailer or distributor must charge.

Question 19

A claim that a price is below a manufacturer's suggested or list price may be deceptive if

Accepted Answer

If few or no sales occur at the claimed price in a retailer's market area, it suggests that the price may not be a genuine discount from the manufacturer's suggested or list price. Therefore, such a claim could be considered deceptive.

Question 20

Price discrimination is illegal under the

Accepted Answer

Price discrimination is illegal under the Robinson-Patman Act, which prohibits price discrimination that substantially lessens competition between different purchasers of commodities of like grade and quality. The Sherman Act, Federal Trade Commission Act, and Anti-Competitive Act are other antitrust laws but do not specifically address price discrimination. The Consumer Goods Pricing Act is not a real law.

Quiz 14: Arriving at the Final Price

Price discrimination refers to

Price deals that mislead consumers fall into the category of

Vertical price fixing refers to

Deceptive pricing practices are outlawed by legislation and enforced by which federal agency?

Resale price maintenance was declared illegal in 1975 under the

The Robinson-Patman Act allows for price differentials to different customers under several conditions. Which of the following practices would be permitted?

Controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price is called

When a seller represents a price as reduced, the item must have been offered in good faith at a higher price for a substantial previous period. Former price comparisons are deceptive if

The practice of offering a bargain that is conditional on the purchase of other products may exist when a buyer is offered the "1-Cent Sales," the "Buy 1, Get 1 Free," or the "Get 2 for the Price of 1" deal. Such pricing is legal only if

The Robinson-Patman Act covers promotional allowances as well as discounts. To legally offer promotional allowances to buyers, the seller must do so on __________ basis to all buyers distributing the seller's products.

Advertising such as "Retail Value $100, Our Price $85" is deceptive if

The Robinson-Patman Act allows for price differentials to different customers under several conditions. Which of the following practices would be permitted?

The Robinson-Patman Act allows for price differentials to different customers under several conditions. Which of the following practices would be permitted?

Two or more competitors explicitly or implicitly setting prices is referred to as

The practice of charging different prices to different buyers for goods of like grade and quality is referred to as

Vertical price fixing involves controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price. This practice is also called

A claim that a price is below a manufacturer's suggested or list price may be deceptive if

Price discrimination is illegal under the