A retail store that drops all of its product prices by 25% will experience a(n)________ in its overall gross profit percentage but may experience a(n)________ in sales volume.
A) increase, increase
B) decrease, decrease
C) increase, decrease
D) decrease, increase

Question

Quizplus · Accepted Answer

Dropping prices by 25% will decrease the gross profit percentage because the profit margin per item is reduced. However, the lower prices may attract more customers, potentially increasing sales volume.

A Retail Store That Drops All of Its Product Prices