Which of the Following Statements About Cost and Its Impact

question 206

Multiple Choice

Which of the following statements about cost and its impact on online shopping is most accurate?

• A)Dynamic pricing is commonly used online because there is no need to respond quickly to changes in supply and demand conditions.
• B)The margins for online offerings are usually higher than those purchased in traditional marketplaces.
• C)Any price advantage for online purchases is lost in shipping and handling fees.
• D)Many of the most popular items bought online can be purchased at the same price or cheaper than in retail stores.
• E)Dynamic pricing is the most commonly used pricing strategy for Internet purchases.

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Definitions:

Direct Labour

The labour costs directly attributable to the production of goods or services, including wages for workers who physically manufacture a product.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, excluding direct materials and direct labor costs.

Contribution Margin

The difference between sales revenue and variable costs, used to cover fixed expenses and then contribute to profit.

Variable Expenses

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