Auro Inc., a manufacturer of lawn mowers, sells a lawn mower model both to retail chain Streetmart and to standalone store Lawnworks in the town of Bayside. Auro sells the model to Streetmart at $5 less per unit than it sells to Lawnworks as Streetmart buys more mowers. Streetmart's retail prices are therefore lower than those of Lawnworks. Which of the following statements is true of this case?

Question

Quizplus · Accepted Answer

Section 2(a) of the Robinson-Patman Act prohibits discrimination in price between different purchasers of "commodities of like grade and quality" when the effect of the price discrimination may be to "substantially lessen competition or tend to create a monopoly" in any relevant market. In the given case, Auro Inc. is in violation of Section 2(a) of the Robinson-Patman Act because it discriminates prices between retail chain Streetmart and standalone store Lawnworks.

Auro Inc, a Manufacturer of Lawn Mowers, Sells a Lawn Mower