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 delivered to Richmond would cost the buyer $230.
B. both buyers would pay $300 for one ton of widgets.
C. one ton of widgets delivered to Baltimore would cost the buyer $220.
D. one ton of widgets costs a Baltimore buyer the same as a Richmond buyer.
E. None of these answers is correct.
Answer: D
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