Cost Justification Law and Legal Definition

Cost justification is an affirmative defense against a charge of price determination available under the Robinson-Patman Act. It shows that the seller’s incur lower costs in serving those customers who are paying less. However, a cost justification based on the difference between an estimated average cost of selling to one or two large customers and an average cost of selling to all other customers cannot be accepted as a defense to a charge of price discrimination.