Which of the following is NOT a characteristic of cost-of-service pricing?
A)Prices are established based on fixed and variable costs of transportation
B)Prices vary based on volume and distance
C)Prices tend to rise as shipping distance increases
D)Carriers price their services at the highest levels the markets will bear

Question

Which of the following is NOT a characteristic of cost-of-service pricing?
A)​Prices are established based on fixed and variable costs of transportation
B)​Prices vary based on volume and distance
C)​Prices tend to rise as shipping distance increases
D)​Carriers price their services at the highest levels the markets will bear

Quizplus · Accepted Answer

Cost-of-service pricing is based on the actual costs incurred to provide the transportation service, therefore carriers do not try to price their services at the highest levels the markets can bear. Instead, prices are established based on cost components, such as fixed and variable costs, and they may vary based on volume and distance, and tend to increase as shipping distance increases.

Which of the Following Is NOT a Characteristic of Cost-Of-Service