CPP - Certified Pricing Professional Legal and Ethical Constraints Questions and Answers

Question 1

Two major home improvement retailers secretly agree to set a minimum price for all power drills they sell, effectively ending competitive pricing on these items.
Which specific illegal pricing practice does this scenario describe?

Accepted Answer

Horizontal price fixing

Answer

Price discrimination

Answer

Predatory pricing

Answer

Price gouging

Question 2

A large national distributor of office supplies offers a 20% discount to a major corporate chain but only a 5% discount to a small, independently owned store for the same bulk order of paper. Assuming the cost to serve both customers is identical, this practice may be illegal under which U.S. federal law?

Accepted Answer

The Robinson-Patman Act

Answer

The Sherman Act

Answer

The Clayton Act

Answer

The Federal Trade Commission Act

Question 3

In the wake of a declared state of emergency due to a hurricane, a local hardware store increases the price of portable generators from $400 to $1,500. This practice is most likely an example of what?

Accepted Answer

Price gouging

Answer

Price skimming

Answer

Penetration pricing

Answer

Value-based pricing

Question 4

A dominant technology company with significant market share prices its new web browser software at $0, incurring substantial losses. Evidence suggests the company's goal is to drive smaller, competing browser companies out of business, after which it plans to monetize the user base through other means. This strategy could be legally challenged as:

Accepted Answer

Predatory pricing

Answer

Collusive pricing

Answer

Price lining

Answer

Deceptive pricing

Question 5

Which of the following is a core principle of ethical pricing that emphasizes being open and clear with customers about the costs and components that make up a final price?

Accepted Answer

Price transparency

Answer

Price maximization

Answer

Competitive parity

Answer

Cost-plus pricing

Question 6

A B2B software provider wants to offer a discount to a large potential client to win their business. To comply with the Robinson-Patman Act, which of the following justifications would be a valid legal defense for this price difference compared to other clients?

Accepted Answer

The discount reflects cost savings from a simplified delivery and service process for that client.

Answer

The large client has more brand recognition.

Answer

The sales team has a better relationship with the large client.

Answer

The large client is based in a more desirable geographic location.