A markup chain:
A) only applies to consumer products, not to business products.
B) implies that a retailer must always apply a smaller markup than a wholesaler.
C) causes lower prices in longer channel systems.
D) determines the price structure in a channel of distribution.
E) None of the above is true.

Question

Quizplus · Accepted Answer

A markup chain applies to both consumer and business products, but it primarily determines the price structure and distribution of consumer products. The idea that a retailer must always apply a smaller markup than a wholesaler is not necessarily true, as it may depend on the specific products and market conditions. Additionally, the length of the channel system does not necessarily determine lower prices. Therefore, the best choice is D, as it accurately reflects the role of a markup chain in determining price structure in a distribution channel.

A Markup Chain