Scenario 20.2 Use the Following to Answer the Questions

question 111

Multiple Choice

Scenario 20.2
Use the following to answer the questions.
The BASF Chemical Company in Germany has developed a new rubberized coating.The product has an application for cell phones and other hand-held electronic devices that gives them protection from falls and scratches.BASF plans to market the product directly to businesses that manufacture the casings for these types of products.BASF currently uses a system of salespeople headquartered in Germany,while its primary business customers are in China.
-Refer to Scenario 20.2.If BASF were to price its product in barrels from the factory,before it is loaded on the carrier,this would be an example of ____ pricing.

• A)buy-back allowance
• B)geographic
• C)F.O.B destination
• D)F.O.B.factory
• E)base-point

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Definitions:

Producer Surplus

The difference between the amount that producers receive from the sale of a good or service and the minimum amount they would accept.

Equilibrium Price

The equilibrium price is the market price at which the quantity of goods supplied is equal to the quantity of goods demanded, leading to market balance.

Equilibrium Quantity

The amount of goods or services supplied that is equal to the amount demanded at the market equilibrium price.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, leading to market equilibrium.