Offering a Noncumulative Quantity Discount Is Done to

question 189

Multiple Choice

Offering a noncumulative quantity discount is done to

• A)reduce the seller's shipping costs.
• B)encourage bigger orders.
• C)discourage small orders.
• D)shift some of the storing function to the buyer.
• E)All these answers are correct.

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Definitions:

Substitution Effect

The economic principle that as prices rise or incomes decrease, consumers will replace more expensive items with less costly alternatives.

Real Wages

Real wages refer to the purchasing power of wages, taking into account inflation, showing the quantity of goods and services that can be bought.

Legal Minimum Wage

The lowest hourly, daily, or monthly remuneration that employers are legally allowed to pay workers.

Equilibrium Wage Rate

The wage rate at which the quantity of labor supplied is equal to the quantity of labor demanded in the market.