The phenomenon of "shipping the good apples out" occurs because:
A)shipping implies a fixed charge is included in the price.
B)people prefer high quality goods to low quality.
C)the relative price of high and low quality goods is too low.
D)people buy the lowest price goods locally.

Question

Quizplus · Accepted Answer

The phenomenon of "shipping the good apples out" occurs because shipping implies a fixed charge is included in the price. This means that the cost of shipping is the same regardless of the quality of the goods being shipped. As a result, sellers have an incentive to ship their higher quality goods (the "good apples") to distant markets where they can fetch a higher price, covering the fixed shipping costs, while lower quality goods are more likely to be sold locally where these costs do not apply or have less impact on profitability.

The Phenomenon of "Shipping the Good Apples Out" Occurs Because