Budget Wrench Co. sold its wrenches to a variety of retail outlets at $1 each. Stony Hardware purchased a large quantity of the wrenches and used them over a six-month period as a special advertised sale item, priced at 25 cents each. Budget Wrench Co. requested Stony Hardware to stop selling its wrenches as a "special" sale item, but Stony Hardware refused to do so. Loss leader selling is an offence under the Competition Act.

Question

Quizplus · Accepted Answer

Loss leader selling, where a product is sold at a price below its market cost to stimulate other profitable sales, is not inherently illegal or an offense under the Competition Act. The legality depends on the jurisdiction and specific circumstances, such as intent to eliminate competition.