The Negative Relationship Between the Price of a Good and the Quantity

question 30

Multiple Choice

The negative relationship between the price of a good and the quantity demanded is known as:

• A) the law of quantity supplied
• B) the law of supply
• C) the law of demand
• D) the law of quantity demanded

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Definitions:

Lower of Cost

A principle requiring that inventory be recorded at the lower of its historical cost or current market value.

Net Realisable Value

The estimated selling price in the ordinary course of business minus any costs necessary to make the sale, used primarily in inventory valuation.

Inventory Accounts

Accounts used in accounting to track the cost of the inventory held by a business until it is sold or otherwise disposed of.

Cost of Goods Manufactured

The total cost of producing goods during a specific period, including materials, labor, and overhead.