Cumulative Quantity Discounts Encourage Repeat Buying from the Same Seller

question 226

True/False

Cumulative quantity discounts encourage repeat buying from the same seller, while noncumulative quantity discounts encourage large individual orders.

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Definitions:

Utility Per Dollar

The amount of satisfaction or usefulness gained per unit of currency spent, used to measure consumer value.

Marginal Utility

Marginal utility is the change in total satisfaction or utility that a consumer experiences from consuming an additional unit of a good or service.

Utility Maximization

The process by which consumers allocate their spending to achieve the greatest level of satisfaction or utility from their available resources.

Preferences

The individual choices or subjective evaluations consumers make regarding the satisfaction they expect from consuming goods or services.