A Manager at JCPenney Discovers That Dillard's Has Reduced the Price

question 78

Multiple Choice

A manager at JCPenney discovers that Dillard's has reduced the price of its children's Levi's from $31.99 to $24.99, according to an advertisement in the Sunday newspaper.She immediately phones her store and instructs the salesperson on duty to put a sign up next to their children's Levi's that reads, "SALE: $24.99." This is an example of what pricing strategy?

• A) secondary-market pricing
• B) periodic discounting
• C) reference pricing
• D) random discounting
• E) comparison discounting

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Definitions:

Fixed Cost

Costs that remain constant regardless of the level of production or sales, such as lease payments and salaries.

Quantity

The amount or number of a material or immaterial good considered as a unit or total.

Average Total Costs

The total cost of production (including both fixed and variable costs) divided by the number of units produced, representing the average expense per unit.

Marginal Cost

The price associated with the creation of one more unit of a product or service.