As a general rule,each channel participant wants a price that provides a __________ sufficient to cover its __________ and provide a contribution to __________.
A) net profit; costs; sales
B) gross margin; expenses; profit
C) sales level; net profits; costs
D) contribution; gross margin; sales
E) sales; gross profit margin; net profit

Question

Quizplus · Accepted Answer

The participants in a channel, such as retailers, wholesalers, and manufacturers, aim for a price that covers their expenses and yields a profit. This profit is measured as the gross margin or the difference between the selling price and the cost of goods sold. Therefore, option B is the best answer as it includes these elements in the correct order. Option A is incorrect as it equates net profit with sales, which are not the same. Option C is incorrect as it reverses the order of net profit and costs. Option D is incorrect as it equates contribution with sales, which is not accurate. Option E is incorrect as it omits the expenses element.

As a General Rule,each Channel Participant Wants a Price That