The Robinson-Patman Act says that to be legal, price differences must be based on:
A) a need to meet competition and cost differences
B) a reasonable profit margin as determined by the FTC
C) freight costs
D) transportation differences
E) None of these alternatives is correct.

Question

Quizplus · Accepted Answer

The Robinson-Patman Act allows for price differences as long as they are based on a need to meet competition and cost differences. This means that companies can offer different prices to different customers as long as the differences are justified by differences in the costs involved in producing and selling the product or by competition with other companies. Freight costs and transportation differences may be factors in determining cost differences, but they are not the only factors that can justify price differences. The FTC does not determine reasonable profit margins under the Robinson-Patman Act.

The Robinson-Patman Act Says That to Be Legal, Price Differences