Which of the Following Statements About Cost and Its Impact

question 16

Multiple Choice

Which of the following statements about cost and its impact on online shopping is most accurate?

• A)Fixed pricing is commonly used online because there is no need to respond quickly to changes in supply and demand conditions.
• B)The margin for online offerings is usually higher than those purchased in a traditional marketplace.
• C)Dynamic pricing is the most commonly used pricing strategy for Internet purchases.
• D)Any price advantage for online purchases is lost in shipping and handling fees.
• E)Lower external information search costs is one of the major reasons for the popularity of online shopping.

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Definitions:

Common Stock Account

An equity account that represents the amount of shares owned by shareholders in a corporation.

Temporary Accounts

Accounts used to record transactions for only a single accounting period, which are then reset or closed at the period's end, such as revenues, expenses, and dividends.

Supplies

Items used in the operation of a business that are not directly related to the production of goods or services, such as office supplies.

Prepaid Expenses

Payments made in advance for goods or services that will be received in the future.