What kind of discount is offered on the cost of goods based on the quantity of merchandise ordered?

The correct answer is quantity discounts. This type of discount is specifically designed to encourage customers to purchase larger amounts of merchandise by offering a reduced price based on the volume of the order. Businesses often use quantity discounts as a strategy to increase sales and reduce inventory by motivating customers to buy more items, allowing them to benefit from lower prices for larger purchases.

The concept behind quantity discounts is that it can lead to economies of scale for suppliers as well, since processing larger orders can reduce shipping and handling costs per item. This can ultimately lead to a win-win situation where both the buyer and seller achieve their objectives.

Other options might have nuances but do not specifically capture the essence of the discount related to the order quantity. For example, a bulk discount may imply large orders generally but isn't a standard term used in all contexts like quantity discounts, which explicitly tie the discount to the quantity being purchased. Similarly, an order discount might refer to reductions based on the total order irrespective of quantity, while a bulk order discount specifies a certain level of volume that needs to be met and doesn't directly encapsulate the broader idea of adjusting the price based on quantity purchased.