Which of the Following Statements About Geographical Adjustments to Price

question 268

Multiple Choice

Which of the following statements about geographical adjustments to price is most accurate?

• A)In FOB origin pricing,the seller selects the mode of transportation.
• B)In FOB with freight-allowed pricing,the seller must pay for all transportation costs.
• C)Multiple-zone pricing is sometimes referred to as "spider web" pricing.
• D)Basing-point pricing methods have been used in industries where freight expenses are a significant part of the total cost to the buyer.
• E)Geographical adjustments can be subject to government regulation if the firm cannot supply objective data (lists of mountains,rivers,weather conditions,etc. )explaining why those adjustments need to be made.

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Definitions:

Adverse Selection

Form of market failure resulting when products of different qualities are sold at a single price because of asymmetric information, so that too much of the low-quality product and too little of the high-quality product are sold.

High Blood Sugar

A condition characterized by an excessively high level of glucose in the blood, commonly associated with diabetes.

Excess Drinking

The consumption of alcohol beyond what is considered moderate or socially acceptable, often leading to adverse health and social effects.

Asymmetric Information

Situation in which a buyer and a seller possess different information about a transaction.