When the manufacturer reduces prices to channel members to compensate them for the services they perform, it is known as a:
A) cash discount.
B) noncumulative quantity discount.
C) cumulative quantity discount.
D) consumer discount.
E) trade discount.

Question

Quizplus · Accepted Answer

A trade discount is given by the manufacturer to channel members as a reduction in the list price of the product or service. This discount compensates the channel members for the services they perform, such as distribution, sales, and storage.

When the Manufacturer Reduces Prices to Channel Members to Compensate