CPP Legal & Ethical Considerations in Pricing 3

Question 1

The concept of 'zone pricing' by fuel distributors has faced legal scrutiny primarily because it may:

Accepted Answer

Constitute price discrimination that harms competing buyers in higher-priced zones

Answer

Zone pricing can raise Robinson-Patman concerns when it results in competing retailers paying different wholesale prices, potentially disadvantaging those in higher-priced zones.

Question 2

A SaaS company charges enterprise clients $50,000/year and small businesses $500/year for the same software. This pricing structure is most defensible under which legal/ethical rationale?

Accepted Answer

Value-based differentiation tied to differing value received and ability to pay

Answer

Charging different customer segments prices commensurate with the value they receive is a well-established and legally defensible pricing practice.

Question 3

Which government agency has primary jurisdiction over deceptive pricing practices in US consumer markets?

Accepted Answer

Federal Trade Commission (FTC)

Answer

The FTC has primary authority to regulate unfair or deceptive acts and practices in commerce, including deceptive pricing under Section 5 of the FTC Act.

Question 4

A retailer advertises a product as 'Was $200, Now $99' but the item was never actually sold at $200. This practice violates which pricing regulation?

Accepted Answer

FTC's Guides Against Deceptive Pricing

Answer

The FTC's Guides Against Deceptive Pricing specifically prohibit false reference prices or fictitious 'former prices' used to inflate the apparent savings.

Question 5

In the context of CPP ethics, 'price gouging' most typically occurs when:

Accepted Answer

Sellers exploit consumer vulnerability during emergencies by charging excessive prices

Answer

Price gouging refers to exploiting emergencies or disasters to charge unconscionably high prices for essential goods, which is illegal in many US states.

(CPP) Certified Pricing Professional Practice Test

(CPP) Certified Pricing Professional Practice Test

CPP Legal & Ethical Considerations in Pricing 3