Selling Terms 2/10, Net 30 Indicates Which of the Following

question 57

Multiple Choice

Selling terms 2/10, net 30 indicates which of the following?

• A) The purchaser is required to pay the entire bill within 10 days.
• B) The purchaser can take a 20% discount if they pay within 30 days.
• C) The purchaser can take a 2% discount if they pay within 10 days.
• D) The purchaser can take a 2% discount if they pay within 30 days.

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Definitions:

Underallocates Resources

A situation where resources are not distributed efficiently, leading to potential waste and underproduction.

Demand Curve

A graph representing the relationship between the price of a good and the quantity demanded by consumers at various prices.

Normal Profits

The minimum profit necessary for a company to remain competitive in the market, often equated to the opportunity cost of capital.

Allocative Efficiency

A state of the economy where resources are allocated in a way that maximizes the overall benefit to society.