Question

Okeydokey, Inc. sells its canned beets to its wholly owned subsidiary, Buylow Co., which then sells the beets in the nationwide chain of Buylow grocery stores. In addition, Okeydokey sells canned beets to various other grocery store chains. The beets sold by Okeydokey to Buylow are packaged by Okeydokey under the Buylow label. The beets sold by Okeydokey to the other grocery store chains are packaged under the Okeydokey label. Despite the different names, however, the beets sold by Okeydokey under the two labels are the same in quality. The price at which Okeydokey sells the beets to Buylow is significantly lower than the price at which it sells the beets to the other chains. One of the other chains has brought a Robinson-Patman Act lawsuit against Okeydokey on the theory that Okeydokey engaged in price discrimination. Has Okeydokey violated the Robinson-Patman Act? Explain your reasoning.

Answer

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