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There are several legal defenses to these types of alleged Robinson-Patman violations, most importantly: (1) the price difference is justified by different costs incurred by the seller in manufacture, sale, or delivery (e.g., volume discounts), or (2) the price concession was given in good faith to meet a competitors
What is the meaning of cost justification?
Definition meaning Cost justification refers to a legal defense used by sellers to explain why they charge different prices to different customers.
What is the purpose of the Robinson-Patman Act?
Cost justification refers to a legal defense used by sellers to explain why they charge different prices to different customers. Under the Robinson-Patman Act, this defense asserts that the seller incurs lower costs when serving certain customers, which can justify offering them lower prices.
What is the cost justification strategy?
The meeting competition defense requires the seller to demonstrate that its differential pricing was made in good faith to meet (but not beat) the prices of a competitor. The cost justification defense requires evidence of actual cost savings that are equal to or greater than the difference in prices.
What is an example of a justification defense?
Cost justification persuades resource allocators that the cost of an item is justified by its benefits. Sometimes, people seek to persuade others by making assertions about the proposed benefits.
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