Asked by Lindsey Conrad on May 01, 2024
Verified
Which one of the following factors tends to favour longer credit periods?
A) High consumer demand.
B) Lower priced merchandise.
C) Increased credit risk.
D) Merchandise with low collateral value.
E) Increased competition.
Credit Periods
The time frame offered by a seller to a buyer to pay for the goods or services purchased on credit.
Consumer Demand
The desire coupled with the purchasing power for specific goods or services that consumers are willing and able to buy at a given time.
- Acquire knowledge about the role competition and product properties play in defining credit period decisions.
Verified Answer
ZK
Zybrea KnightMay 05, 2024
Final Answer :
E
Explanation :
Increased competition often leads to businesses offering longer credit periods as a way to attract or retain customers. This is because, in a highly competitive market, companies look for ways to differentiate themselves and make their offerings more attractive. Offering longer credit periods can be an effective strategy to encourage sales and customer loyalty.
Learning Objectives
- Acquire knowledge about the role competition and product properties play in defining credit period decisions.