Walmart and Costco Achieve Long-Term Profitability Through Volume

question 54

Multiple Choice

Walmart and Costco achieve long-term profitability through volume. What type of strategy do these companies use?

• A) prestige pricing
• B) loss leader pricing
• C) everyday low pricing
• D) high/low pricing

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Definitions:

Diluted Earnings

An earnings calculation that accounts for all potential shares that could be issued, showing the lowest possible earnings per share.

Preferred Stock

A type of stock that provides a specific dividend that is paid before any dividends are paid to common stockholders, and that typically does not have voting rights.

Common Stock

A type of equity ownership in a corporation, representing a claim on a portion of the profits and assets, and giving voting rights in corporate decisions.

Net Income

The total profit of a company after all revenues, costs, and expenses have been deducted.