When the Retailer Decides to Pass Through Very Little of the Promotion

question 61

Multiple Choice

When the retailer decides to pass through very little of the promotion to customers but purchase in greater quantity during the promotion period to exploit the temporary reduction in price,the result is

• A) a lowering of the price of the product for the end customer.
• B) increased purchases and thus increased sales for the entire supply chain.
• C) an increase in the amount of inventory held at the retailer.
• D) all of the above

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Definitions:

Autarky

National self-sufficiency; no economic interaction with foreigners.

Opportunity Cost

The value of the best alternative that is forgone in making any choice or decision.

Terms of Trade

The ratio between a country's export prices and its import prices, indicating the quantity of imports goods a country can purchase through the sale of its exports.

Supply and Demand

Fundamental economic model describing how prices vary as a result of a balance between product availability and consumers' purchasing desires.