A Promotional Tool Often Used with Consumers That Consists of Merchandise

question 181

Multiple Choice

A promotional tool often used with consumers that consists of merchandise offered free or at a significant savings over its retail price is referred to as a

• A) deal.
• B) rebate.
• C) sample.
• D) premium.
• E) coupon.

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Definitions:

Contribution Margin

The amount of revenue from sales that exceeds the variable costs associated with producing a good or service.

Relevant Range

The extent of activity or volume over which the specific cost assumptions and behaviors are considered valid.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing potential benefits that are missed.

Contribution Margin

The difference between a product's selling price and its total variable costs, which helps cover fixed costs and create profit.