The markup approach to price setting used by most intermediaries:
A) makes little sense--given the large number of items carried and the small sales volume of any one item.
B) is very inflexible because the same markup percent must be applied to all products.
C) often uses the trade (functional) discount allowed by the manufacturer.
D) is quite complicated--because each product has a different delivered cost.
E) All of the above.

Question

Quizplus · Accepted Answer

Intermediaries often use the trade discount allowed by the manufacturer as part of their markup approach to pricing. This makes the process less complicated than having to calculate different markups for each product with different delivered costs, and allows for some flexibility in pricing. Choices A, B, and D are incorrect as they provide inaccurate or incomplete information about the markup approach.

The Markup Approach to Price Setting Used by Most Intermediaries