Lee's, a department store, decides to promote its sales during Christmas. In the clothing section, it offers customized men's T-shirts for $11.99. To every customer who purchases a pair of shoes, the shoe department issues a document promising a discount of $20 on the customer's next shoe purchase. The store also has its air conditioners on sale at a reduced price because the sale of air conditioners is slow during the month of December and the company wants to get rid of its slow-moving merchandise.
-Price reduction on air conditions in December is an example of a:
A)Cash discounts
B)Allowances
C)Markdowns
D)Quantity discount
E)Price bundling

Question

Quizplus · Accepted Answer

A markdown is a reduction in the price of an item to increase sales and clear out slow-moving inventory. The price reduction on air conditioners is an example of a markdown as the department store wants to get rid of its slow-moving merchandise. Cash discounts are offered to customers who pay in cash, while allowances are price reductions offered to customers for reasons such as defective or damaged goods. Quantity discounts are provided when customers purchase products in large quantities, and price bundling is the practice of offering two or more products for sale as a package deal at a discounted price. None of these apply to the scenario described in the question.

Lee's, a Department Store, Decides to Promote Its Sales During