A producer in Philadelphia uses "zone pricing." It's 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:
A) one ton of widgets costs a Baltimore buyer the same as a Richmond buyer.
B) both buyers would pay $300 for one ton of widgets.
C) one ton of widgets delivered to Richmond would cost the buyer $230.
D) one ton of widgets delivered to Baltimore would cost the buyer $220.
E) None of these alternatives is correct.

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The Answer of A producer in Philadelphia uses "zone pricing." It's 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:
A) one ton of widgets costs a Baltimore buyer the same as a Richmond buyer.
B) both buyers would pay $300 for one ton of widgets.
C) one ton of widgets delivered to Richmond would cost the buyer $230.
D) one ton of widgets delivered to Baltimore would cost the buyer $220.
E) None of these alternatives is correct.

A Producer in Philadelphia Uses "Zone Pricing