When a Company Maintains Its Price but Removes or Prices

question 60

Multiple Choice

When a company maintains its price but removes or prices separately one or more elements that were part of the former offer, such as free delivery or installation, it is known as ________.

• A) escalating
• B) differentiation
• C) unbundling
• D) reverse discounting
• E) delayed quotation pricing

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Definitions:

Financing Activities

Activities that result in changes in the size and composition of the equity capital and borrowings of an entity, typically reported in the cash flow statement.

Cash Basis

An accounting method where revenues are recognized when cash is received, and expenses are recognized when cash is paid.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of materials and labor directly tied to product creation.

Operating Activities

Transactions and events related to the core business functions, including revenue and expense activities that affect net income on the income statement.