CPP Regulatory Framework & Compliance 2

Question 1

Under the Robinson-Patman Act, which defense allows a seller to match a competitor's lower price to a specific buyer?

Accepted Answer

Meeting competition defense

Answer

The meeting competition defense permits a seller to lower prices to a specific buyer in good faith to match a competitor's equally low price.

Question 2

Which federal agency has primary enforcement authority over deceptive pricing practices under the FTC Act?

Accepted Answer

Federal Trade Commission

Answer

The Federal Trade Commission enforces Section 5 of the FTC Act, which prohibits unfair or deceptive acts including deceptive pricing.

Question 3

A company prices a product below its average variable cost in order to drive a rival out of the market. This is best described as:

Accepted Answer

Predatory pricing

Answer

Predatory pricing involves setting prices below cost with the intent to eliminate competition and later raise prices monopolistically.

Question 4

The Sherman Antitrust Act Section 1 prohibits which of the following pricing behaviors?

Accepted Answer

Horizontal price fixing among competitors

Answer

Section 1 of the Sherman Act prohibits contracts, combinations, or conspiracies in restraint of trade, including agreements among competitors to fix prices.

Question 5

Under EU competition law, which article of the Treaty on the Functioning of the European Union (TFEU) addresses anticompetitive agreements including price fixing?

Accepted Answer

Article 101

Answer

Article 101 TFEU prohibits agreements between undertakings that restrict competition, including horizontal price-fixing arrangements.

(CPP) Certified Pricing Professional Practice Test

(CPP) Certified Pricing Professional Practice Test

CPP Regulatory Framework & Compliance 2