Setting the promotion budget so as to match the budgets of the competition is characteristic of which of the following budget methods ?
Correct answer: C. Competitive parity method
- A. Affordable method
- B. Percentage of Sales method
- C. Competitive parity method
- D. Objective and task method
Explanation
The competitive parity method sets the promotion budget in line with competitors’ spending. The percentage-of-sales method instead bases the budget on the firm’s own sales.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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