Question

Manufacturer does marketing research and estimates that consumers will accept a price of $50 for a jacket. if the manufacturer expects to offer trade discounts of 40/10 to retailers and wholesalers, what price will the manufacturer receive for the jacket?

Answer 1

Trade discounts are offered to customers with high volume orders in a specified date of payment. In the problem given, the estimated price of the jacket is $50 but with 40% discount within 10 days of purchase.

Therefore, $50 * 40% = 20. The manufacturer will receive $30 which is the price less discount.