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Which of these 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 buyer subtracts the transportation costs from the list price.
C) Multiple-zone pricing is sometimes referred to as "spider web" pricing.
D) Basing-point pricing seems to have been used in industries where freight expenses are only a minor 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.
Geographical Adjustments
Modifications made to strategies or operations to accommodate differences in geographical locations.
FOB Origin Pricing
A pricing term that indicates the buyer assumes responsibility for the goods once they leave the seller's premises and also bears the shipping costs.
Spider Web Pricing
Spider Web Pricing is a pricing strategy that adjusts frequently in response to market demands and competitor prices, similar to a spider adjusting its web.
- Explain the legal considerations and regulations affecting geographical pricing and price adjustments.
- Distinguish between legal and illegal practices in price adjustments and geographical pricing adjustments.
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Learning Objectives
- Explain the legal considerations and regulations affecting geographical pricing and price adjustments.
- Distinguish between legal and illegal practices in price adjustments and geographical pricing adjustments.
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