If a firm's suppliers stop offering discounts, then its use of trade credit is more likely to increase than to decrease, other things held constant.

Question

Quizplus · Accepted Answer

If suppliers stop offering discounts, the firm may need to use trade credit to maintain cash flow and meet its obligations. Therefore, it is more likely that the firm will increase its use of trade credit rather than decrease it.

If a Firm's Suppliers Stop Offering Discounts, Then Its Use