AutoCorp is a reputed automobile manufacturer while SUVmart is an independent distributor who buys automobiles from the former.During the current year,SUVmart wants to buy its quota of 250 Rhinos from AutoCorp.For the quota system to work efficiently,AutoCorp must commit credibly to the:
A)exclusive territory.
B)double markup.
C)retail price.
D)wholesale price.

Question

Quizplus · Accepted Answer

For the quota system to work efficiently and for SUVmart to be able to plan their purchases accurately, AutoCorp needs to commit credibly to the wholesale price. This means that SUVmart can rely on the fact that they will be able to purchase the Rhinos from AutoCorp at a predetermined and predictable cost, allowing them to plan their pricing and profitability accordingly. The other options are not as relevant for the quota system or for the relationship between AutoCorp and SUVmart.

AutoCorp Is a Reputed Automobile Manufacturer While SUVmart Is an Independent