Which of the following is a TRUE statement about markups?
A) A firm can lose money even when using a high markup.
B) Markup percents are computed as a percent of the cost of the product.
C) It's easier for a producer to administer the prices consumers pay for products if the markup used varies from one intermediary to the next.
D) The lower the markup, the lower the profit.
E) None of the above is true.

Question

Quizplus · Accepted Answer

A high markup does not necessarily mean that a firm will make a profit. If the cost of production is too high or if demand for the product is lower than anticipated, a high markup can result in losses for the firm.

Which of the Following Is a TRUE Statement About Markups