What kind of benefit do size discounts provide?

Size discounts are designed to encourage consumers to purchase larger quantities of a product by offering them a lower cost per unit. This pricing strategy is based on the principle that buying in bulk reduces the overall price per item for the consumer, thereby providing an incentive to increase their purchase volume. For example, if a company sells a product at $10 for a single unit but offers it at $8 per unit when five units are bought, the buyer benefits from the reduced rate by opting for the larger quantity. This reduction in the price per unit is what makes size discounts attractive to consumers, as it effectively lowers their overall expenditure for the same product when purchased in greater quantities.

The other options do not capture the essence of size discounts effectively. Fixed prices for small quantities imply a lack of variability in price, which does not align with the concept of discounting. A variable cost depending on market conditions suggests a pricing model that fluctuates based on external factors rather than the volume purchased. Lastly, a set price for bulk purchases does not necessarily indicate a lower cost per unit; it simply establishes a fixed price that may not offer any discount based on quantity bought. Thus, the correct answer clearly aligns with the fundamental advantage provided by size discounts.