Chapter 14.6, Problem 1LO

Summary Introduction

To discuss: The legal constraints on pricing.

Business uses varies strategies to set the amount or value of funds that are required to buy a product is termed as price.

Explanation of Solution

Legal constraints:

The decisions of pricing have more constraints imposed by state, federal and local government.

The most important legal constraints on pricing are as follows:

Robinson-Patman act:  This law prohibits the price discrimination when the marketers sell the same product with same price to different consumers.

It prevent from selling low price than the normal price to drive the competitive marketers out of the business.

Unfair trade laws: It makes the sellers to maintain a minimum price for similar stock. This act was enacted to prevent the small shops.

Federal trade commission:  This act is formed to prevent the unfair trade practices, anticompetitive, and deceptive marketing.