Question

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.

Answer 1

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