Question 1

Vertical price fixing refers to

Accepted Answer

Vertical price fixing involves agreements between independent buyers and sellers where sellers are required not to sell products below a minimum retail price, often set by the manufacturer.

Question 2

Consider Figure 14-9 above."A" represents which of the following legislative acts?

Accepted Answer

The answer of Consider Figure 14-9 above."A" represents which of...

Question 3

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 occurs when agreements are made between independent buyers and sellers where sellers have to maintain a minimum retail price. This is often used by manufacturers to maintain the perceived value of their products and to prevent price wars between retailers. It is illegal under antitrust laws.

Question 4

Price discrimination refers to

Accepted Answer

Price discrimination involves charging different prices to different buyers for goods that are essentially the same. This can be achieved by offering discounts to certain groups, such as students or seniors, or by charging higher prices in certain regions or markets where consumers are willing to pay more. The key factor is that the goods are of like grade and quality, but the seller is able to charge different prices based on factors such as the buyer's willingness to pay or their purchasing power.

Question 5

Consider Figure 14-9 above."C" represents which of the following legislative acts?

Accepted Answer

The answer of Consider Figure 14-9 above."C" represents which of...

Question 6

A unique feature of the Robinson-Patman Act is that it 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 they are based on differences in the cost of manufacturing, sale, or delivery resulting from different methods or quantities in which goods are sold or delivered to buyers. This means that companies can charge different prices to different customers as long as the price difference is based on a legitimate cost difference, such as quantity discounts or differences in shipping costs. The other options listed (B, C, D, and E) would not be permitted under the Robinson-Patman Act.

Question 7

Consider Figure 14-9 above."D" represents which of the following legislative acts?

Accepted Answer

The answer of Consider Figure 14-9 above."D" represents which of...

Question 8

A unique feature of the Robinson-Patman Act is that it 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 they are due to changing market conditions, avoiding obsolescence of seasonal merchandise, including perishables, or closing out sales.

Question 9

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

The practice described is resale price maintenance, also known as vertical price fixing. Price discrimination involves charging different prices to different customers for the same product, while predatory pricing involves pricing products below cost to drive competitors out of business. A tying arrangement involves a seller requiring a buyer to purchase one product in order to purchase another product, and exclusive dealing involves a seller requiring a buyer to only purchase their products and not from competitors.

Question 10

Price discrimination is illegal under the

Accepted Answer

Price discrimination is illegal under the Robinson-Patman Act, which prohibits sellers from charging different prices to different customers for the same product unless there are justifiable cost differences. The other options are not directly related to price discrimination.

Question 11

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

Accepted Answer

Price discrimination refers to the practice of charging different prices to different buyers for goods of like grade and quality. This can be done based on various factors such as the buyer's location, their willingness to pay, the quantity of the products purchased, etc. However, price discrimination can be illegal if it leads to a significant reduction in competition or harms consumers.

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 non-discount 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 a resale price maintenance agreement, which is a form of vertical price-fixing. This means that they are trying to dictate the minimum price that retailers must sell their product for, in order to protect the profit margins of higher-priced non-discount customers.

Question 13

Price fixing refers to

Accepted Answer

Price fixing refers to a conspiracy among firms to set prices for a product, which is illegal under antitrust laws. It involves collusion between companies to agree on a certain price range for the products they sell, which limits competition and harms consumers.

Question 14

Consider Figure 14-9 above."B" represents which of the following legislative acts?

Accepted Answer

The answer of Consider Figure 14-9 above."B" represents which of...

Question 15

Resale price maintenance was declared illegal in 1975 under the

Accepted Answer

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

Question 16

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

Accepted Answer

Horizontal price fixing refers to when two or more competitors agree to set prices for their products or services at a fixed rate. This is a violation of antitrust laws and can lead to legal action against the companies involved. Competitive collusion, vertical price fixing, lateral price fixing, and price cooperation are not the commonly used terms in this context.

Question 17

Price fixing is illegal under the

Accepted Answer

Price fixing is a violation of the Sherman Antitrust Act, which prohibits agreements or conspiracies that restrain trade or commerce. Price fixing can also be considered as a form of collusion or anti-competitive behavior, which is against the principles of fair competition in the market.

Question 18

A conspiracy among firms to set prices for a product is referred to as

Accepted Answer

Price fixing refers to an agreement among firms to set prices for a product. This is illegal under antitrust laws as it reduces competition and leads to higher prices for consumers. Price discrimination refers to charging different prices for the same product to different groups of consumers, while predatory pricing refers to pricing a product below cost to drive competitors out of the market. Tying arrangements and exclusive dealing are practices in which a firm uses its market power to force customers to buy one product as a condition for buying another, or to prevent them from buying from competitors, respectively.

Question 19

In one of its least favorite actions,Amazon.com was caught fiddling with its price tags.Avid DVD buyers,buying in quantity for resale,found that the online retailer was offering different customers different prices for the same DVD,and complained vociferously.Amazon was caught red-handed.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

Amazon.com was practicing price discrimination by offering different prices to different customers for the same item. This is illegal in some countries and can be seen as unfair pricing.

Question 20

Price fixing is illegal per se under the Sherman Act.What does "per se" mean?

Accepted Answer

"Per se" means "in and of itself" or "by itself," indicating that the action is inherently illegal without the need for further analysis or evidence of its harm to competition.

Quiz 14: Arriving at the Final Price

Vertical price fixing refers to

Consider Figure 14-9 above."A" represents which of the following legislative acts?

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

Price discrimination refers to

Consider Figure 14-9 above."C" represents which of the following legislative acts?

A unique feature of the Robinson-Patman Act is that it allows for price differentials to different customers under several conditions.Which of the following practices would be permitted?

Consider Figure 14-9 above."D" represents which of the following legislative acts?

A unique feature of the Robinson-Patman Act is that it allows for price differentials to different customers under several conditions.Which of the following practices would be permitted?

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 __________.

Price discrimination is illegal under the

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

Price fixing refers to

Consider Figure 14-9 above."B" represents which of the following legislative acts?

Resale price maintenance was declared illegal in 1975 under the

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

Price fixing is illegal under the

A conspiracy among firms to set prices for a product is referred to as

Price fixing is illegal per se under the Sherman Act.What does "per se" mean?