When a new product is not being sold at the rate originally forecasted,the retailer may reduce the price in order to reduce the inventory of the product.This reduction is known as a
A) markdown.
B) rebate.
C) quantity discount.
D) coupon.
E) cash discount.

Question

Quizplus · Accepted Answer

A markdown is a reduction in price that is implemented by the retailer in order to sell off excess inventory. When a new product is not selling at the rate that was originally anticipated, the retailer may decide to reduce the price in order to stimulate demand and move the product out of inventory. This is known as a markdown. A rebate is a partial refund that is offered by the manufacturer, while a quantity discount is a reduction in price that is offered to customers who purchase a certain quantity of a product. A coupon is a voucher that entitles the customer to a discount when they purchase a product, and a cash discount is a reduction in price that is offered to customers who pay in cash instead of using credit.

When a New Product Is Not Being Sold at the Rate