Robbie lives in Alaska and is a frequent buyer of science fiction books from an Internet site. Robbie's brother who lives in South Carolina also buys science fiction books at the same site. Both brothers typically buy six books per month, and Robbie usually pays about $3 more for UPS shipping than his brother. The price differential is most likely due to:
A) distance-based pricing.
B) the current legal interpretation of the Robinson-Patman Act.
C) a new judicial interpretation of Federal Trade Commission regulations.
D) inverse demand.
E) cash discounts.

Question

Quizplus · Accepted Answer

The price differential in shipping costs between Robbie in Alaska and his brother in South Carolina is most likely due to distance-based pricing. This means that the further the distance the package has to travel, the more it will cost to ship. Since Alaska is much farther from most shipping centers compared to South Carolina, it costs more to ship items there.

Robbie Lives in Alaska and Is a Frequent Buyer of Science