Which Term Refers to a Deduction from List Price Applied

question 55

Multiple Choice

Which term refers to a deduction from list price applied to a customer's total purchases made during a specific period?

• A) Cumulative quantity discount
• B) Noncumulative quantity discount
• C) Cash discount
• D) Quantity discount

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Definitions:

Perfect Complements

Goods that are always used together in fixed proportions, where the increase in consumption of one good leads to an equal increase in the consumption of the other.

Income Effect

How an alteration in the income of an individual or the economy influences the demand level for a particular product or service.

Substitution Effect

The shift in consumption tendencies brought on by changes in the relative value of goods, compelling consumers to opt for an alternative product.

Utility Function

A mathematical representation that ranks alternatives according to their utility for an individual, illustrating preferences over a set of goods and services.