How would a ban on freight absorption that is requiring fob


Question: 1. What type of geographic pricing policy is most appropriate for the following products (specify any assumptions necessary to obtain a definite answer):

(a) a chemical by-product,

(b) nation-ally advertised candy bars,

(c) rebuilt auto parts,

(d) tricycles?

2. How would a ban on freight absorption (that is, requiring F.O.B factory pricing) affect a producer with substantial economies of scale in production?

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