Typically, the Sales Volume Declines with an Increase of a Product

question 35

Multiple Choice

Typically, the sales volume declines with an increase of a product price. It has been observed, however, that for some luxury goods the sales volume may increase when the price increases. The following scatterplot illustrates this rather unusual relationship. What can be said about the linear relationship between Price and Sales?

• A) The relationship is negatively moderate.
• B) There is no relationship.
• C) The relationship is positively strong.
• D) The relationship is negatively strong.

---

Definitions:

List Price

The official selling price of a product or service before any discounts are applied.

Boot

Additional value or cash added to a transaction to even out an exchange or transfer of assets.

Fixed Asset

A fixed asset is a long-term tangible piece of property or equipment that a company owns and uses in its operations to generate income, not easily converted into cash.

Intangible

An intangible asset is an asset that lacks physical substance, such as intellectual property, goodwill, and licensing agreements.