The Four Common Methods That Companies Use to Decide on a Promotion

question 123

Multiple Choice

The four common methods that companies use to decide on a promotion budget include the affordable method,the percentage-of-sales method,________,and the objective-and-task method.

• A) financial method
• B) incremental growth method
• C) zero-based budgeting method
• D) competitive-parity method
• E) last year's budget method

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Definitions:

Downward-Sloping Demand

A representation of the inverse relationship between price and quantity demanded, highlighting that consumers buy more of a good as its price decreases.

Monopolistically Competitive

A market structure characterized by many firms selling products that are similar but not identical, allowing for slight differences to influence consumer choice.

Short-Run Profits

Short-run profits refer to the excess revenues over costs that a firm can generate in a period where at least one factor of production is fixed.

Long-Run Profits

Earnings that a firm expects to generate over an extended period, taking into account all variable and fixed costs.