Some business practices are prohibited or restricted by federal and state laws designed to encourage competition. The federal laws govern businesses between different states,while the state laws govern businesses within that state.
Fair trade laws are those which permit the manufacturer or distributor of trade-marked products to make contracts with retail dealers fixing the resale price. These laws exist in certain states. However, state courts have been ruling out some of the laws. Others have been questioned and rulings are awaited.
Several states have had specific laws prohibiting price discrimination between purchasers of like grade and quantity when the effect is to injure competition. Laws prohibiting sales below costs have been in force in certain states. A fairly typical provision has prohibited any article at less than cost to seller,if the purpose was to injure competitors.
In addition,laws of many states deal with false and deceptive advertising. Such laws range from general prohibitions against false advertising to regulating the advertising of specific goods. Occasionally, some of the laws are revised,and new interpretations are made by the courts.
Why do some people sell goods at a price lower than their cost?
【正确答案】：Because they want to injure competition in their favor.
