Marketing Essentials

Chapter 27: Pricing Math

Self-Checks

1
What is gross profit?
A)The difference between sales revenue and the cost of goods sold
B)The profit margin
C)Net profit
D)The difference between sales revenue and the cost of goods plus business expenses
2
What is the maintained markup?
A)A percentage markup
B)A dollar markup
C)The difference between a product’s final sale price and its cost
D)The difference between retail price and wholesale price
3
What is the purpose of employee discounts?
A)To attract more customers through word of mouth
B)To encourage employees to buy and use their company’s products
C)To get rid of overstock
D)To discourage employee theft
4
Why would a retailer mark down or discount merchandise?
A)To reduce the quantity of stock
B)To encourage prompt payment in business-to-business situations
C)To encourage large orders
D)All of the above
5
What is a trade discount?
A)A discount the customer gets when trading in old merchandise for new goods
B)A form of bartering
C)The way in which manufacturers quote prices to wholesalers and retailers
D)A quantity discount for customers who are in a specific trade
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