By and Large,the Price of Each Item on a Restaurant

question 2

Multiple Choice

By and large,the price of each item on a restaurant menu is:

• A)an accurate reflection of the item's marginal cost.
• B)based strictly on consumer demand.
• C)a function of cost and the price elasticity of demand for the item.
• D)a fixed multiple of the item's total cost.

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Definitions:

Accounts Payable

Money owed by a business to its suppliers shown as a liability on the company's balance sheet.

Finished Goods Inventory

Products that have been manufactured and are ready for sale, but have not yet been sold to customers.

Goods In Process Inventory

The value of materials, labor, and overhead costs for products that are partially completed in the manufacturing process.