1. A producer in Philadelphia uses zone pricing. The producer is selling widgets for $150/ton in...

1. A producer in Philadelphia uses zone pricing. The producer is selling widgets for $150/ton in the Eastern Zone, which includes Richmond and Baltimore. The actual freight cost from its plant to Baltimore is $70/ton and from its plant to Richmond is $80/ton. In this situation,

Multiple Choice

one ton of widgets costs a Baltimore buyer the same as a Richmond buyer.
both buyers would pay $300 for one ton of widgets.
one ton of widgets delivered to Richmond would cost the buyer $230.
one ton of widgets delivered to Baltimore would cost the buyer $220.
None of these answers is correct.

2. A main purpose of unfair trade practice legislation is to

Multiple Choice

prevent manufacturers from taking high markups.
eliminate price competition on manufacturers' brands.
require some minimum percentage markup on cost.
permit different types of retail outlets to charge different retail prices.
guarantee retailers some profit.

3. When looking for an Uber car during rush hour, a customer notices that the same ride that she took earlier in the afternoon is three times more expensive. What explains this?

Multiple Choice

Uber's surge pricing model adjusts prices to better match supply and demand for its services.
Uber uses predictive analytics to run real-time pricing experiments.
Uber uses a pricing model that is based on a customer's ability or desire to pay for its services.
Uber has a one-price policy, but rides in the afternoon and rides in the evening are not considered to be under the "same conditions."
Uber needs to pay its drivers more in the evening due to overtime laws.

4. A discount of 2/10, net 30 means the buyer can take a 2 percent discount off the face value of the invoice if the invoice is paid within 10 days.

True or False

5. American Airlines maintains a frequent flier loyalty program that allows members to accumulate 25,000 miles and then redeem these miles for a free round-trip ticket. This is a(n)

Multiple Choice

introductory price deal.
F.O.B. discount.
cash discount.
cumulative quantity discount.
bundle price discount.

6. A large producer who offers no discounts and the same prices to all customers in the United States

Multiple Choice

does not have pricing objectives.
ignores the benefits of administered pricing.
probably ignores nonprice competition too.
may be "playing it safe" because of concern about the Robinson-Patman Act.
is probably violating the antidumping laws.

Solutions

Expert Solution

ans 1
one ton of widgets costs a Baltimore buyer the same as a Richmond buye

In Zone pricing average freight is charged to all the buyers of same geographic region

ans 2
require some minimum percentage markup on cost.
According to legislation there is a minimum % markup on cost so that the sellers can earn minimum profit
ans 3
Uber's surge pricing model adjusts prices to better match supply and demand for its services.
When demand is more than supply they use this
ans 4 True
2/10 discount terms means 2% discount if paid within 10 days

ans 5
Cumulative quantity discount
As due to more rides they got the points so due to quantity they got this discount

ans 6
"playing it safe" because of concern about the Robinson-Patman Act. is the correct option

ekkarill92 answered 1 year ago

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