A Producer in Philadelphia Uses Zone Pricing

Multiple Choice

A producer in Philadelphia uses zone pricing.The producer is 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 answers is correct.