Michael Soles-owner of Soles Shoe Store-recently discovered that shoe stores in his trading area have an average markup of 40 percent. Upon investigation, Michael found that his average markup is $15 on shoes that he sells for $45. This suggests that:
A) Michael has higher-than-average costs.
B) Michael is pricing his products higher than his competitors.
C) Michael is taking a smaller average markup than his competitors.
D) Michael has a relatively high stockturn rate.
E) Michael's markups in dollar amounts are about the same as his competitors.

Question

Quizplus · Accepted Answer

Michael's average markup of $15 on shoes sold at $45 represents a 33.3 percent markup, which is lower than the industry average of 40 percent. This suggests that Michael is taking a smaller average markup than his competitors.

Michael Soles-Owner of Soles Shoe Store-Recently Discovered That Shoe Stores