Everyday Low Pricing Is a Strategy Devoted to Continuous Low

question 220

Multiple Choice

Everyday low pricing is a strategy devoted to continuous low prices as opposed to:

• A)seasonal changes in prices based on current demand.
• B)purely cost-based prices that vary as the manufacturer's costs vary.
• C)relying on short-term price-cutting tactics such as cents-off coupons, rebates, and special sales.
• D)prices that are set on a weekly or monthly basis in reaction to competitors' actions.

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Definitions:

Variable Cost

A cost that varies with the level of output or production, such as materials and labor costs.

Break-Even Point

The level of production or sales at which total revenues equal total costs, resulting in no net loss or gain.

Variable Costs

Costs that vary directly with the level of production or volume of output.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.