Which of the Following Is the Primary Difference Between Introductory

question 117

Multiple Choice

Which of the following is the primary difference between introductory price dealing and use of a low penetration price policy?

• A)Introductory price dealing targets the top of the demand curve,while a low penetration price policy targets the bottom of the demand curve.
• B)A low penetration price policy targets the top of the demand curve,while introductory price dealing targets the bottom of the demand curve.
• C)In introductory price dealing,the price continuously moves down the demand curve,while the price is static with a low penetration price policy.
• D)With a low penetration price policy the price is fixed-as opposed to introductory price dealing,where the price varies according to the customer's ability to pay.
• E)In introductory price dealing,the price rises after the introductory offer,while it remains unchanged with a low penetration price policy.

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Definitions:

Gross Accounts Receivable

The total amount owed to a company by its customers for goods or services delivered on credit before any deductions for returns or bad debts.

Bad Debts Expense

The cost associated with accounts receivable that are not expected to be collected.

Contra Asset

An asset account where its balance is opposite of the normal balance, used to offset the balance of a related account, such as allowance for doubtful accounts offsetting accounts receivable.

Expense

An outflow of money to another person or company to pay for an item or service, or for a cost required to operate a business.