If a Construction Boom Leads to an Increase in the Price

question 49

Multiple Choice

If a construction boom leads to an increase in the price of lumber, how will the higher lumber prices influence the wood furniture market?

• A) The demand for wood furniture will decline, and furniture prices will fall.
• B) There will be a shortage of wood furniture.
• C) There will be a surplus of wood furniture.
• D) The supply of wood furniture will decline, and furniture prices will increase.

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Definitions:

Weighted Average

A calculation method that takes into account the varying degrees of importance of the numbers in a data set, resulting in a figure that represents the overall effect.

Average Unit Cost

The total cost of goods available for sale divided by the number of units available for sale, used to value inventory.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, giving more weight to some numbers than others.