With Respect to Markups and Turnover, a Marketing Manager Should

question 16

Multiple Choice

With respect to markups and turnover, a marketing manager should be aware that:

• A) a low stockturn rate increases inventory carrying costs.
• B) depending on the industry, a stockturn rate of 2 or 3 may be quite profitable.
• C) high markups don't always mean big profits.
• D) speeding turnover often increases profits because the firm's operating costs are a function of time and the volume of goods sold.
• E) All of the above are true statements.

---

Definitions:

Constant Marginal Costs

A situation where the cost of producing one more unit of a good or service remains unchanged regardless of the volume of production.

Marginal Cost

The rise in overall expenses associated with producing an extra unit of a product or service.

Marginal Benefit

The additional benefit received from consuming one more unit of a good or service.

Marginal Costs

The extra expense associated with making an additional unit of a product or service.