Taking Advantage of the Pricing Flexibility Inherent in the Wholesale

question 25

Multiple Choice

Taking advantage of the pricing flexibility inherent in the wholesale model,Amazon offered many books (especially e-books) below the cost that other retailers had to pay to publishers.By doing this,Amazon showed how business models can be affected through

• A) combination.
• B) evolution.
• C) disruption.
• D) combustion.

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Definitions:

Cash Discount

An incentive offered by sellers to encourage buyers to pay earlier, resulting in a reduction in the amount due.

Captive Finance Company

A finance company that is wholly owned by a parent company, primarily for the purpose of providing financing to the customers of the parent company.

Credit Function

The role of extending credit to consumers or businesses, enabling the purchase of goods or services before payment.

Controlled Disbursements

A cash management technique where companies strategically issue payments to regulate their cash outflows and maximize the available cash.