[amp_mcq option1=”Prompt payment of cash” option2=”Purchasing products in bulk quantity” option3=”Payment of cash within 30 days time period” option4=”Opening of several units in different markets for business expansion E. Maintaining good relationship with the customers” correct=”option2″]
The correct answer is: B. Purchasing products in bulk quantity.
A trade discount is a discount given by a manufacturer to a wholesaler or retailer in order to encourage them to purchase a large quantity of goods. This type of discount is often used to clear out old stock or to attract new customers.
Option A is incorrect because prompt payment of cash is usually rewarded with a cash discount, not a trade discount.
Option C is incorrect because payment of cash within 30 days is usually the standard payment terms for most businesses.
Option D is incorrect because opening several units in different markets for business expansion is not a common reason for offering a trade discount.
Option E is incorrect because maintaining good relationships with customers is important for any business, but it is not usually a reason for offering a trade discount.
In conclusion, the correct answer is: B. Purchasing products in bulk quantity.