Which action is described by placing a price reduction on an item to clear inventory?

• A. Markdown
• B. Markup
• C. Discounting
• D. Liquidation

Answer: (A)

Lowering the listed price to move stock is the concept being tested. That action is called a markdown. In retail, a markdown is a deliberate price cut on inventory to clear slow- moving or excess items and make room for new merchandise. It’s a targeted, stock-clearing tactic rather than a temporary promotional discount; discounts are broader and can apply to sales events, while a markdown usually reflects a permanent or defined-price reduction on the item itself. Markup is the opposite process—raising price above cost—and liquidation refers to selling off large quantities (often during a shutdown or major overstock situation), not just a single item clearance. So the term that fits this scenario best is markdown.