CPP Legal and Ethical Constraints 2

Question 1

Under the Robinson-Patman Act, a supplier charges different prices to two competing retailers for the same product. Which defense would most likely justify this price difference?

Accepted Answer

The cost difference is justified by different order volumes reducing shipping costs

Answer

The supplier prefers one retailer over the other

Answer

One retailer is located in a different state

Answer

The supplier wants to grow market share with the lower-priced retailer

Question 2

Which of the following best describes 'resale price maintenance' (RPM) under current U.S. antitrust law?

Accepted Answer

Evaluated under the rule of reason to determine net competitive effects

Answer

Always per se illegal under the Sherman Act

Answer

Always legal as a normal business practice

Answer

Legal only when the manufacturer holds less than 30% market share

Question 3

A pricing manager discovers a competitor's confidential price list was accidentally emailed to her company. What is the most ethically appropriate action?

Accepted Answer

Notify the competitor, delete the information, and avoid using it

Answer

Use the information to undercut competitors before they notice

Answer

Share it internally but do not use it for pricing decisions

Answer

Submit it to legal for competitive intelligence archiving

Question 4

Which antitrust concept describes an agreement among competitors to divide customers, territories, or markets among themselves?

Accepted Answer

Market allocation

Answer

Predatory pricing

Answer

Price leadership

Answer

Tying arrangement

Question 5

A company prices a product below average variable cost in a market it dominates. The intent is to eliminate a smaller rival. This practice is best classified as:

Accepted Answer

Predatory pricing

Answer

Penetration pricing

Answer

Skimming pricing

Answer

Loss-leader pricing

Question 6

Under the Federal Trade Commission Act, which of the following pricing practices most clearly constitutes an 'unfair or deceptive act'?

Accepted Answer

Advertising a 'sale' price on an item never previously sold at the reference price

Answer

Charging a premium price for a luxury brand

Answer

Offering volume discounts to large buyers

Answer

Raising prices during periods of high demand

Question 7

A U.S. company bribes a foreign government official to secure a favorable pricing contract. Which law is most directly violated?

Accepted Answer

Foreign Corrupt Practices Act (FCPA)

Answer

Sherman Antitrust Act

Answer

Robinson-Patman Act

Answer

Clayton Act