The Textbook for Your Economics Class Is Available in an American

question 141

Multiple Choice

The textbook for your economics class is available in an American version and in a much cheaper Indian version that has the same text but no colors for the graphs (the difference in prices is much higher than the difference in costs) . Why is this the case?

• A) Demand in the United States is much more inelastic than demand in India.
• B) Demand in the United States is much more elastic than demand in India.
• C) No one in India has any use for color graphs.
• D) There are more substitutes for your textbook in the United States.

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Definitions:

Percentage-of-Completion

An accounting method used to recognize revenue and expenses of long-term projects proportionally to the project's completion level.

Revenue Recognition

The accounting principle that dictates the conditions under which revenue is recognized or recorded, primarily focusing on the timing and amount.

Percentage-of-Completion

An accounting method recognizing revenues and expenses of long-term contracts as a percentage of work completed.

Transfer Pricing

The price charged when two parts of the same multinational corporation, often the parent company and a subsidiary in another country, engage in trade with one another.