Monday, April 20, 2009

Chapter 18: 2.1

The seller has three defenses if charged with price discrimination under the Robinson-Patman act:

1. Cost--it's acceptable to charge different prices to different customers if manufacturing or quantity discount savings are involved.

2. Market conditions--price changes that are responses to fluid product or market changes are acceptable (for example goods that will spoil over time, a store-closing sale, etc.).

3. Competition--it's acceptable to adjust prices in response to undercutting from competition.

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