Clarissa Kessler Operates a Store That Sells Recorded Music

question 117

Multiple Choice

Clarissa Kessler operates a store that sells recorded music. Her business suffered tremendously when a giant discount store chain opened a store in the area and is able to sell its products for less than Clarissa's wholesale cost. Is this evidence of illegal price discrimination on the part of the discount store chain?

• A) Yes, it is clearly a violation of the Robinson-Patman Act.
• B) No, because it can be argued that the discount store chain is justified in charging lower prices because it is a large-volume buyer and is able to purchase recorded music at a lower wholesale price than Clarissa.
• C) Yes, the discount store chain is engaging in predatory pricing.
• D) No, even if the price discrimination is based on differences in cost, the law states that it is not illegal.

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Definitions:

Functional Structure

An organizational design that groups employees based on their specialized roles or functions, enhancing efficiency and expertise.

Telecommunications

The transmission of information over significant distances by electronic means, such as through phone lines, the internet, or wireless networks.

Organizational Structure

The system of tasks, workflows, reporting relationships, and communication channels that link together the diverse parts of an organization.

Departmentalization

The method an organization uses to divide its work among distinct departments, each specializing in a particular task or function.