Every Spring, Motorists Do More Driving Than During the Winter

question 201

Multiple Choice

Every spring, motorists do more driving than during the winter months. Every spring, the price of gasoline increases and the motorists buy more gasoline. This experience suggests that the

• A) laws of supply and demand are both contradicted for gasoline, though only during the spring driving season.
• B) "law of demand" does not always hold for necessities like gasoline.
• C) "law of supply" does not always hold for necessities like gasoline.
• D) None of the above answers are correct.

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Definitions:

Gross Profit

The financial measure calculated by subtracting the cost of goods sold from revenue, representing the profit a company makes after deducting the costs associated with making and selling its products.

Net Sales

The amount of sales revenue left after deducting sales returns, allowances, and discounts from gross sales.

Gross Profit

The profit from sales revenue remaining after the cost of goods sold is subtracted, but before accounting for overheads, payroll, taxes, and interest expenses.

Sales Returns

Goods returned to the seller by the buyer after the sale, leading to a reduction in sales revenue.