When Comparing Markup Based on Cost to Markup Based on Selling

question 27

Multiple Choice

When comparing markup based on cost to markup based on selling price:

• A) none of these
• B) all else being equal, markup based on cost will result in a higher markup rate
• C) markup based on cost provides more profit for the business
• D) when using markup based on selling price, cost can never be determined

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Definitions:

Inflation

The rate at which the general level of prices for goods and services is rising, eroding purchasing power.

Unemployment

The state of being without a job despite actively looking for work, measured as a percentage of the labor force.

Normative Economics

Normative economics deals with the evaluation of economic outcomes through the prism of what ought to be, recommending actions by what is deemed desirable or ideal.

Macroeconomics

The branch of economics that studies overall economic dynamics, including inflation, unemployment, and economic growth, on a national or global scale.