Insta-Mark Inc. makes custom-imprinted three-ring binders for business customers. Its prices are: $4.00 per binder for a single order of up to 50 binders; $3.50 per binder for a single order of 51 to 100 binders; and $3.00 per binder for a single order over 100 binders. Insta-Mark is using a:
A) Seasonal discount.
B) Cash discount.
C) Cumulative quantity discount.
D) Noncumulative quantity discount.
E) Basic list price.

Question

Quizplus · Accepted Answer

Insta-Mark is using a noncumulative quantity discount, where the price per binder decreases as the order quantity increases, but only within each tier of pricing. So, if a customer orders 60 binders, they will pay $3.50 for each of the first 50 binders and $4.00 for each of the additional 10 binders.