A buyer should work to determine an acceptable initial price because over the course of a long-term contract, as a price adjustment mechanism (if used) will apply the initial price as the base for future adjustments.

Question

Quizplus · Accepted Answer

This statement is true. The initial price serves as the base for any price adjustment mechanism that may be included in a long-term contract. Therefore, it is important for the buyer to negotiate and agree upon an acceptable initial price.

A Buyer Should Work to Determine an Acceptable Initial Price