marketing ch14 2nd

Federal Trade Commission Act

Predatory Pricing, Deceptive Pricing, Geographical pricing

Consumer Goods Pricing Act

Vertical Price fixing

price fixing

A conspiracy among firms to set prices for a product is termed ______________

geographical pricing

Basing-point pricing can be viewed as illegal under the Robinson-Patman Act and the Federal Trade Commission Act if there is clear-cut evidence of a conspiracy to set prices. In general, ___________________ practices have been immune from legal and regulatory restrictions, except in those instances in which a conspiracy to lessen competition exists under the Sherman Act or price discrimination exists under the Robinson-Patman Act.

Robinson-Patman Act

Geographical Pricing, Price Discrimination

Sherman Act

Horizontal Price Fixing, Predatory Pricing

Deceptive pricing

Price deals that mislead consumers fall into the category of deceptive pricing. ___________ is outlawed by the Federal Trade Commission Act. This includes: Bait and switch Bargains conditional on other purchases Comparable value comparisons Comparisons with suggested prices Former price comparisons

horizontal price fixing

Price fixing is illegal per se under the Sherman Act (per se means in and of itself). When two or more competitors explicitly or implicitly set prices, this practice is called _________________. For example, in 2000, six foreign vitamin companies pled guilty to price fixing in the human and animal vitamin industry and paid the largest fine in U.S. history, a hefty $335 million

Regulatory

The task is further complicated by legal and regulatory restrictions. Five pricing practices have received the most scrutiny: (1) price fixing, (2) price discrimination, (3) deceptive pricing, (4) geographical pricing, and (5) predatory pricing

Predatory pricing

is the practice of charging a very low price for a product with the intent of driving competitors out of business. Once competitors have been driven out, the firm raises its prices. This practice is illegal under the Sherman Act and the Federal Trade Commission Act.

price discrimination

the practice of charging different prices to different buyers for goods of like grade and quality. However, not all price differences are illegal; only those that substantially lessen competition or create a monopoly are deemed unlawful. Moreover, "goods" is narrowly defined and does not include discrimination in services.