While Comparison Pricing Claims Are Legal If They Are Truthful

question 61

Multiple Choice

While comparison pricing claims are legal if they are truthful, the FTC warns sellers not to advertise a) factory or wholesale prices unless such prices are what they claim to be, b) comparable value prices on imperfect goods, or c) ________.

• A) a sale unless the products are available in sufficient quantity to meet expected demand
• B) in a way which confuses potential buyers of the product
• C) a description of a product unless all versions of the product are offered with the same pricing terms
• D) a price reduction unless it is a savings from the usual retail price
• E) if only a limited quantity are available at the reduced price

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Definitions:

Suppliers

Entities or individuals that provide goods or services to another entity or individual, usually in a business-to-business context.

Time Period Assumption

An accounting principle that the life of a business can be divided into discrete time periods, such as months and years, for reporting purposes.

Operating Cycle

The duration of time it takes for a company to purchase inventory, sell the goods, and collect cash from the sale.

Dividends Declared

A firm's announcement of the payment of a dividend to shareholders by a specified date, representing a commitment to distribute a portion of earnings.