Pat's Pen Co.manufacturers and sells an inexpensive ball-point pen.Salley's Stationery purchases the pens for $.25 each in quantities of 1,000.Salley's discovered that a national chain,a competitor of Salley's,buys the pen at $.20 for 1,000.If Salley's Stationery sues Pat's Pen Co.for price discrimination
A)Pat's Pen Co.will win if it can prove that it has been selling to the national chain continuously at the cheaper rate.
B)Pat's Pen Co. will win if it can prove that it did not intend to economically harm Salley's Stationery.
C)Salley's Stationery will win if it can prove price discrimination occured and that it lessened competition.
D)Salley's Stationery will win since price discrimination is a per se violation with no real defenses.

Question

Quizplus · Accepted Answer

Salley's Stationery may win the case if they can prove that price discrimination occurred and that it resulted in reduced competition. The fact that another competitor is purchasing the same product at a cheaper rate supports the claim of price discrimination. Pat's Pen Co. cannot defend itself by proving continuous sales to the national chain or lack of intent to harm Salley's Stationery as these defenses are not recognized in cases of price discrimination.