David Likes New Balance Running Shoes

question 17

Multiple Choice

David likes New Balance running shoes.However,when he stopped by the Foot Locker to buy a new pair of running shoes he notice that Nike had a new pair of running shoes that cost $350.To David the higher price of the Nike shoe indicated that it would be a better pair of running shoes.This is an example of:

• A) premium pricing
• B) price lining
• C) prestige pricing
• D) exclusive pricing
• E) selective pricing

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Definitions:

Owner's Equity

The residual interest in the assets of the enterprise after deducting its liabilities, also known as shareholder's equity.

Net Income

The final amount of money a company makes after taking away all expenses, including taxes and the costs of operation, from the total income.

Owner Drawings

Amounts withdrawn by the owner of a business for personal use, reducing the owner's equity in the business.

Revenues

The income earned from normal business operations and includes discounts and deductions for returned merchandise.