Pricing Laws

Deceptive Pricing

use of false or misleading statements in advertising

What is an example of deceptive pricing?

"special" sales, "two for one" sales, "factory" prices, "wholesale" prices

Who prevents deceptive pricing?

Federal Trade Commission

Bait-and-Switch Advertising

"baited" by low price advertising and the advertised good is not available, so the customer is switched to a costlier product

Who outlaws bait-and-switch advertising?

Federal Trade Commission

Loss-Leader Pricing

product sold at a low price (at cost or below cost) to stimulate other profitable sales

Price Discrimination

a firm charges different prices to similar customers in similar situations

What protects against price discrimination?

Clayton Antitrust Act of 1914, Robinson Patman Act

Price Fixing

agreement among competitors to raise, fix, or otherwise maintain the price at which their goods or services are sold

What outlawed monopolies?

Sherman Antitrust Act of 1890

Predatory Pricing

practice of selling a product or service at a very low price

What is the intention of predatory pricing

drive competitors out of the market

Dumping

any kind of predatory pricing, especially in the context of international trade

What outlaws dumping?

Anti-Dumping Laws, Sherman Antitrust Act of 1890

Resale Price Maintenance

manufacturers try to force retailers to sell their products at a certain price

What outlawed resale price maintenance?

Consumer Goods Pricing Act