Marvin,a Sole Proprietor,sells Perk-Up Cereal to Grocery Stores

Marvin,a sole proprietor,sells Perk-Up cereal to grocery stores.Some stores only buy a few boxes,but others buy large quantities.Marvin finds that it is cheaper to bulk ship large amounts to stores that buy a large quantity of the cereal.Is it permissible under the Robinson-Patman Act for Marvin to charge the purchasers of larger quantities less per box for the cereal?

A) yes, but only to the extent that the reduced price is supported by cost savings
B) yes, and there is no requirement that the reduced price be supported by cost savings
C) yes, but only because a food product is involved, and the reduced price must be supported by cost savings
D) yes, but only because a sole proprietor is involved, and the reduced price must be supported by cost savings
E) no, Marvin may not reduce the price to purchasers of large quantities

Correct Answer:

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