Question

3. Individual Problems 14-3

Your family business uses a secret recipe to produce salsa and distributes it through both smaller specialty stores and chain supermarkets. The chain supermarkets have been demanding sizable discounts, but you do not want to drop your prices to the specialty stores.

True or False: One way to offer a lower price while defending yourself against antitrust lawsuits would be to offer a volume discount for larger salsa orders.

True

False

Answer 1

The answer is: "True"

To begin with, in order to establish a better relationship and also to increase the number of the company's sales the managers has to establish a discount for larger salsa orders so in that way the big supermarket will buy more and will be satisfied for the discount and with the price they are getting and the specialty stores will understand that the difference in the price is due to the amount of the orders. Moreover, by doing that strategy the company is not breaking the antitrust law because there is no special arrangement between the company and the supermarket but is just a matter of volume and if the specialty stores increase their orders then they will have the discount as well, and therefore the antitrust law is not been broke in any way.