Charlie Ferragamo is a sales representative for the Season-All Spice Company, and sells spices to large food service operations and restaurants. Charlie used to be able to justify selling his products for a higher price than the competition because he believed his spices were of higher quality. However, now the demand for individual brands of spices has become very elastic because buyers perceive few differences among the brands. One of Charlie's regular customers told Charlie that another spice company offered him a significantly lower price on spices, and he asked if Charlie could match the price. Charlie said, "I have to see a written price quote from the competitor. If I lower my price without seeing the price quote, I could be accused by my other customers of engaging in ________________."
A) dumping
B) price discrimination
C) price fixing
D) zone pricing
E) None of these is a good answer

Question

Quizplus · Accepted Answer

Charlie is concerned about being accused of price discrimination, which occurs when a seller charges different prices to different customers for the same product or service without a justified reason based on cost differences. By asking for a written price quote, Charlie wants to ensure that any price adjustment is based on legitimate competitive pricing rather than arbitrary differences between customers.

Charlie Ferragamo Is a Sales Representative for the Season-All Spice