A Firm Sells Small-Ticket Items to Their Regular Customers on Customer

question 88

Multiple Choice

A firm sells small-ticket items to their regular customers on customer charge accounts and then bills the customers each month.This type of credit arrangement is called:

• A)trade credit.
• B)charge account credit.
• C)installment credit.
• D)debit card credit.

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Definitions:

Sole Supplier

A market situation in which only one company provides a particular product or service, potentially leading to monopoly power and less competitive prices.

Monopoly

A reiteration for a market structure with a single seller dominating the whole supply of a particular product or service, without close substitutes.

Substitutes

Goods or services that can be used in place of each other; when the price of one increases, the demand for the other increases.

Perfect Competition

Perfect competition describes a market structure where many firms sell identical products, entry and exit are easy, and no single buyer or seller has market power to influence prices.