B2B Quantity Discounts

question 45

Multiple Choice

B2B quantity discounts:

• A)are used to encourage consumers to purchase larger quantities each time they buy.
• B)might be cumulative or noncumulative.
• C)are considered illegal under the Robinson-Patman Act.
• D)usually lead to price wars.
• E)can only be offered to large purchasers.

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Definitions:

Good Substitutes

Products or services that can be used in place of one another, where the increase in price of one leads to an increase in demand for the other.

Price Elasticity of Demand

A measure of how much the quantity demanded of a good changes in response to a change in its price.

Total Expenditures

The sum of all spending or costs incurred by an individual, firm, or government.

Price Elasticity of Demand

An indicator of the responsiveness of the quantity demanded of a product to changes in its price.