Question: Price Discrimination You are the sales representative for a manufacturer of insulation. A customer that accounts for approximately one-third of your sales suddenly asks for a discount because of the volume of its purchases. You are politely told that a refusal will cause the customer to take its business to another manufacturer. Your income is solely from commissions on sales, which are calculated on gross profit margins.

(a) If you agree to a discount, have you broken any law?

(b) If you have violated a law, what are the potential consequences?

(c) If you give the same discount to all customers, would your actions be illegal? Explain.