Final answer:
A trade discount is a reduction from the list price which is used to change prices without publishing a new catalog and give quantity discounts to customers.
Step-by-step explanation:
A trade discount is a reduction from the list price which is used to:
- Change prices without publishing a new catalog.
- Give quantity discounts to customers.
A trade discount is a reduction from the list price offered by sellers to buyers, primarily aimed at incentivizing larger orders or rewarding loyal customers.
For example, a retailer may offer a trade discount of 10% to customers who purchase a certain quantity of a product. This allows the retailer to adjust their prices based on customer demand without having to print new catalogs or change the list price for all customers.