Congress has enacted several laws to enhance competition in the marketplace by outlawing price fixing and deceptive pricing. Legislation also prohibits price discrimination . Moreover, the government can invoke price controls to curb inflation. Unlike consumers, organizational buyers purchase products for resale, for use in their own operations, or for producing other products. When adjusting prices, organizational sellers take into consideration the size of the purchase, geographic factors, and transportation requirements.
Producers commonly provide discounts off list prices to intermediaries.
The categories of discounts include trade or functional discounts , quantity discounts , cash discounts , seasonal discounts , and allowances . Quantity discounts can be either cumulative discounts or noncumulative discounts . Geographic pricing involves reductions for transportation costs or other costs associated with the physical distance between the buyer and the seller. In geographic pricing, prices can be quoted as F.O.B. factory , or F.O.B. destination . Types of geographic pricing include uniform geographic pricing , zone pricing , base-point pricing , or freight absorption pricing .