In Recent Years, There Has Been a Rapid Increase in Consumption

question 169

Multiple Choice

In recent years, there has been a rapid increase in consumption of sushi in Canada and yet, the price of sushi has remained relatively stable.An explanation for this phenomenon could be:

• A)although the demand for sushi has gone up, the supply of fish (an input in the production of sushi) has declined as well.
• B)while the demand for sushi has gone up, the supply of sushi has increase by about the same magnitude and therefore, the price has stayed relatively stable.
• C)while the demand for sushi has gone up, the supply of sushi has decreased by about the same magnitude and therefore, the price has stayed relatively stable.
• D)while the demand for sushi has gone up, the supply of sushi has not changed and therefore, the price has stayed relatively stable.

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Definitions:

Acid-Test Ratio

A financial metric used to determine a company's short-term liquidity by comparing its most liquid assets (excluding inventory) against its short-term liabilities.

Just-In-Time Inventory System

A supply chain management strategy aimed at reducing inventory costs by receiving goods only as they are needed in the production process.

Acid-Test

A liquidity ratio that measures a company's ability to pay off its current liabilities with quick assets without relying on the sale of inventory.

Current Ratio

A financial ratio that measures a company's ability to pay short-term obligations or those due within one year, calculated as current assets divided by current liabilities.