Microsoft Hires Marketing and Sales Specialists to Decide What Prices

question 117

Multiple Choice

Microsoft hires marketing and sales specialists to decide what prices it should set for its products, whereas a wealthy corn farmer in Iowa, who sells his output in the world commodity market, does not.Why is this so?

• A)because Microsoft is large enough to hire the best people in the field
• B)because Microsoft could potentially lose sales if it sets prices indiscriminately
• C)because the wealthy corn farmer is a price maker who sets his price independently of the market price, but Microsoft's optimal output depends on the price it selects
• D)because unlike Microsoft, the wealthy corn farmer is probably a monopolist

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Definitions:

Cash Discount

A reduction in the amount due by a buyer if payment is made within a specified period.

Credit Financing

The process of borrowing funds from lenders to finance business operations, purchases, or investments, typically through loans or issuing bonds.

Source Of Financing

Various means through which a business can obtain funds, including equity, debt, grants, and loans, to support its operations.

Accounts Receivable Balance

The total amount of money owed to a company by its customers for goods or services delivered but not yet paid for.