A carpet retailer requires a 40 percent markup at retail on wall-to-wall carpeting and a 25 percent markup at retail on area rugs. The differences in markup are due to larger minimum purchase quantities and installation costs of wall-to-wall carpeting. This firm is using
A) target pricing.
B) a variable markup policy.
C) price discrimination.
D) price-floor pricing.

Question

Quizplus · Accepted Answer

The firm is using a variable markup policy because it adjusts the markup percentage based on the type of product (wall-to-wall carpeting vs. area rugs), reflecting differences in costs and purchase quantities.

A Carpet Retailer Requires a 40 Percent Markup at Retail