A Dealer Persuades a Customer to Buy a New Car

question 340

Multiple Choice

A dealer persuades a customer to buy a new car by reducing the price to well below that of his competitors. Once the customer has agreed to buy the car, the terms of the sale are shifted, by lowering the value of the trade-in and requiring the purchase of expensive extra equipment. Now the car costs well above the current market rate. This is an example of the ________ procedure.

• A) primacy
• B) lowball
• C) foot-in-the-door
• D) bait-and-switch

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Definitions:

Shareholder Share

Represents the portion of a company's equity owned by an individual or institutional shareholder.

EPS

Earnings Per Share represents the fraction of a firm's profits designated for each share of its common stock, serving as a financial metric.

Stock Dividend

A dividend payment made in the form of additional shares rather than a cash payout, typically to conserve the company's cash.

Capital Accounts

The accounts that show the net worth of a company or individual, including contributions from owners or partners and retained earnings.