Question

Which of the following statements about quantity discounts is false?

A. Quantity discounts encourage bulk purchasing.
B. They are often offered to wholesalers and retailers.
C. They decrease the per-unit cost as the quantity increases.
D. Quantity discounts are not commonly used in business transactions.

Answer 1

Quantity discounts are commonly used in business transactions to encourage bulk purchasing and decrease per-unit cost as the quantity increases.

Step-by-step explanation:

Statement D: Quantity discounts are not commonly used in business transactions.

This statement is false. Quantity discounts are commonly used in business transactions to incentivize bulk purchasing. Businesses offer discounts to customers who purchase larger quantities of a product, encouraging them to buy in bulk. This benefits businesses by increasing sales volume and customer loyalty.

For example, a wholesaler might offer a quantity discount to a retailer who purchases a large number of items at once. The per-unit cost decreases as the quantity increases, providing the retailer with a lower cost of goods sold.