Definitions - Law

Question 1

Price Fixing

Answer 1

Sellers conspire to set the price of a product, usually higher than it would be in a free market

Question 2

Price discrimination

Answer 2

Charging different prices to different (competing) buyers for goods of the same quality and of the same quantity

Question 3

Predatory pricing

Answer 3

Pricing that is intended to drive competitors out of the market or keep competitors from entering the market -usually low prices

Question 4

Resale price maintenance

Answer 4

Manufacturers or channel members try to influence the price at which the product is sold to subsequent purchasers

Question 5

Bid rigging

Answer 5

Sellers collude to set prices in response to bids or quotations for products

Question 6

Misleading advertising

Answer 6

All types of advertising about a product or service that are false or misleading

Question 7

Bait-and-switch

Answer 7

Sellers try to attract customers to their stores by offering a low price on a product (bait); but, once the customers are in the store, sellers try to persuade them to buy a higher priced item (switch)

Question 8

Referral selling

Answer 8

Incentives offered to consumers to provide the names of other potential consumers

Question 9

Refusal to deal

Answer 9

A seller refuses to sell products or services to legitimate buyers

Question 10

Exclusive dealing

Answer 10

A seller refuses to sell to other channel members unless that member agrees to buy exclusively from that particular seller

Question 11

Pyramid selling

Answer 11

Schemes where salespersons are paid to recruit other salespeople, and each new salesperson pays for the right to recruit other salespeople, with some of that money going to earlier recruiters. Participants are often asked to buy a specific quantity of goods or are knowingly sold unreasonable quantities of goods and are not allowed to return the goods on commercially reasonable terms.