Decreasing Selling Prices in Order to Secure Higher Sales Volumes

question 116

Multiple Choice

Decreasing selling prices in order to secure higher sales volumes or market shares:

• A) Will always generate higher sales volumes and market shares.
• B) Can have a negative impact on a firm's profitability.
• C) Should not usually affect profitability.
• D) Should not usually affect contribution margins.
• E) Should not usually affect sales mix.

---

Definitions:

Work in Process

Inventory that is in the production process and has not yet been completed or turned into final goods.

Labeling Department

A section within a manufacturing process dedicated to attaching labels to products, outlining product information or branding.

Production Activity

The series of operations involved in the manufacturing of goods and products.

Accounting

The process of recording, classifying, summarizing, and interpreting financial information.