A Number of Antitrust Laws Have Been Enacted That Affect

question 20

Essay

A number of antitrust laws have been enacted that affect product pricing.
Required:
A.Define price discrimination and predatory pricing.
A.Price discrimination involves charging different prices to different customers for the same goods and services when the price differences are not based on variations in production,selling,and/or distribution cost.Predatory pricing,on the other hand,is the practice of reducing a price for a short time in order to enhance demand and then raising the price sharply,often with restricted supply.
B.Assume that a company has been charged with price discrimination.What role can cost information play in defending the firm's pricing practices?
B.Such information can be used to show differences in costs of providing a product or service to customers.For example,a customer that places a few large orders having low quality requirements can be served less expensively than another customer that places many small orders with tight delivery times and exacting quality specifications.

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Definitions:

Financial Pressures

Situations where money concerns or the need to meet financial obligations cause stress or influence decisions.

Drug And Alcohol

Substances that can alter an individual's physical, mental, or emotional state, with potential for abuse or dependency.

Abusive Relationships

Interpersonal connections characterized by physical, emotional, or psychological harm from one individual towards another.

Alarm Reaction

The initial phase in the stress response where the body prepares to fight or flee, characterized by the release of stress hormones.