Big Corp(BC)is in the Business of Making and Selling Plastic Products

question 69

Multiple Choice

Big Corp.(BC) is in the business of making and selling plastic products.Dominant and Micro both buy plastic products of similar grade and quality regularly from BC.Dominant is the biggest customer of BC while Micro usually buys very small quantities.Due to an unexpected shortfall of raw materials,BC anticipates significant reduction in plastic production at its plants.In order to maintain supply of plastic products to Dominant,BC quotes a 40 percent higher price for its products to Micro.Will this amount to a violation of Section 2(a) of the Robinson-Patman Act?

• A) Yes,because BC is committing primary level price discrimination.
• B) No,because Dominant deserves the preferential treatment.
• C) Yes,because BC is adversely affecting competition at its customer's level.
• D) No,because BC has not made any sales at higher prices to Micro.

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Definitions:

Final Payment

the last payment that completes the payoff of a loan or financial obligation.

Compounded Monthly

The method of calculating interest where the earned interest is added to the principal balance each month.

End-of-month Payments

Payments made at the end of each month, often used in billing cycles or loan agreements.

Car Loan

A financial agreement in which a borrower receives funds to purchase a car and agrees to repay the loan amount plus interest over a specified period.