As Part of Its Commitment to Be a "One Stop

question 23

Multiple Choice

As part of its commitment to be a "one stop garden gnome and glass ball conglomerate" GGGBU starts a service called the gnome placement agency. For a fee, a GGGBU employee will come to a customer's home and install the garden gnome or glass ball in the most attractive spot in the customer's garden. GGGBU prices the service based on the number of competitors in the market: the more competitors, the lower the price and vice versa. Would the Robinson-Patman Act cover this type of pricing discrimination?

• A) Yes. Price discrimination is defined as charging different prices for similar goods.
• B) No. Under the Robinson-Patman Act, the market would be considered homogeneous.
• C) Yes. The Robinson-Patman Act limits the factors a company can use to set prices.
• D) No. The Robinson-Patman Act only covers goods, not services.

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Definitions:

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded, typically downward sloping, indicating an inverse relationship between price and quantity demanded.

Output Axis

In graphing, particularly in economics, this refers to the axis on which the quantity produced or supplied is measured.

Economic Power

The capacity of an entity, such as a company or country, to influence economic outcomes within its environment for its own benefit.

Political Power

The ability or capacity of a person or group to influence or control the actions and policies of a government or organization.