The Robinson-Patman Act and Its Applicability in the Modern Age Research Paper

The Robinson-Patman Act and Its Applicability in the Modern Age - Research Paper ExampleThis cheating(prenominal) business put created a price disparity problem that threatened the survival of small companies or retailers (McElvain 35). Then the Robinson-Patman Act was implemented during the Great clinical depression when these large businesses that had emerged then were having competitive advantages over smaller retailers. thither is no doubt that Robinson-Patman Act doused this economic problem by fighting against price discrimination. And the critics gestate that the Act was most effective during this time period when price fixing posed a serious threat on competition and the economy. As a matter of f exertion, Robinson-Patman Act tended to reduce criminal business practices during the Great Depression. Therefore, four major requirements must occur for a claim to arise under the Robinson-Patman Act.There must be1.a sale of products that are of like grade and quality2.from the same vendor to different purchasers in which there 3. is a discrimination in the prices of the products sold 4.that causes a restraint in competition.This necessitates that if a big company offers to sell a product of similar grade and quality at an expressly cheaper price, the small retailer affected by this action may seek legal recourse for redress and compensation. This action would discourage big businesses from apply their economies of scales to have an advantage over the small businesses. Potentially, if the price of a good is reduced, a company can sell as many pieces of the product to several(prenominal) purchasers at a price that is far cheaper than the offering price by a smaller retailer. This discrimination in price kills competition, and it was discovered to be an proscription to the economic growth during the Great Depression. The Courts opinion in FTC v. Morton Salt, 334 U.S. 37 (1948), illustrates how it was applied during the age of booming large businesses. Int erestingly, the Supreme Court ruled that Morton Salt had acted illegitimately by sell its finest Blue Label salt to large chain-stores at a relatively cheaper price instead of making the same product visible(prenominal) for customers nationwide at the same price. The Federal Trade Commission made sure that the Robinson-Patman Act was enforced to discourage the criminal trade practice of selling goods at a discount price to large stores simply because they could afford to purchase large quantities of the products at a time. One of the possible effects of this practice is that small retailers would be pushed out of business as consumers could not afford to buy the same product or good that are offered at a competitive price by the 3 large stores. This instance of price discrimination was what Robinson-Patman Act fought against in the earliest time. The Congress then perceived the act of price fixing as an inhibitive and unhelpful to the American economy that had already been batter ed by the Great Depression. Critics have always pointed to the fact that the adult male World I contributed to the emergence of the Great Depression, and that the sharp practices by big retailers to cheat the smaller ones was caused by the need to earn higher profitability at the depreciate of other retailers (McElvain 48). Therefore, enacting the Robinson-Patman Act served as a salvaging force to discourage large businesses from making life unbearable for ordinary Americans who had already had enough hardship delinquent to the effects of