A Major Fruit Juice Manufacturer Failed in Its Attempt to Engage

question 72

Multiple Choice

A major fruit juice manufacturer failed in its attempt to engage in price discrimination between students and all other consumers. What is the most likely explanation for this failure?

• A) There was nothing to prevent the students from reselling the fruit juice to other consumers.
• B) The two groups of consumers have different demand elasticities for fruit juice.
• C) The cost of producing the product is relatively high.
• D) Market demand for fruit juice is inelastic.

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Definitions:

Job Order Costing System

A job order costing system tracks costs for each individual job or batch of goods produced, assigning specific materials, labor, and overhead costs to each.

Custom Goods

Products that are personalized or made to order according to the specifications provided by the customer.

Work in Process Account

An account used to record the costs associated with goods that are partially completed in manufacturing but not yet ready for sale.

Job Order Cost System

An accounting system used to track costs associated with specific jobs or orders, including materials, labor, and overhead.