The Practice of Charging Different Prices to Different Buyers for Goods

question 254

Multiple Choice

The practice of charging different prices to different buyers for goods of like grade and quality is referred to as

• A) horizontal price fixing.
• B) resale price maintenance.
• C) price discrimination.
• D) predatory pricing.
• E) bait and switch pricing.

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Definitions:

Contribution Margin Ratio

The percentage of sales revenue remaining after variable costs are deducted, indicating how much contributes to fixed costs and profit.

Fixed Expenses

Costs that do not change with the level of production or sales over a certain period, such as rent, salaries, and insurance.

Sales

The total amount received from selling goods or services over a given period.

Residual Income

The income that exceeds the minimum required return on an investment or business segment.