Under the Robinson-Patman Act, a Producer May Not Be Able

question 56

Multiple Choice

Under the Robinson-Patman Act, a producer may not be able to charge one retailer a lower price than it charges another retailer just because the first retailer buys more merchandise. Volume discounts can be a violation of the Robinson-Patman because, according to the law:

• A) price discounts injure competition
• B) price discounts unfairly target urban areas
• C) price discounts give large volume retailers an advantage over small volume retailers
• D) price discounts unfairly target urban areas and price discounts give large volume retailers an advantage over small volume retailers
• E) price discounts injure competition and price discounts give large volume retailers an advantage over small volume retailers

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Definitions:

Common Stock Dividend

A portion of a company's earnings distributed to common shareholders, typically in the form of cash or additional shares.

Retained Earnings

The portion of a company's profit that is held or retained and saved for future use, reinvestment in the business, or to pay debt, rather than being paid out as dividends.

Additional Paid-In Capital

The excess amount paid by investors over the par value of shares, reflecting the additional capital contributed to a corporation.

Accumulated Comprehensive Income

The total of all net income and other comprehensive income items that have been accumulated over the life of a company.