If a Good Is Very Inexpensive, but It Is a Necessity

question 287

Essay

If a good is very inexpensive, but it is a necessity, you would predict that demand for the good is:
A.is price-elastic.
B.is price-inelastic.
C.is price unit-elastic.
D.has indeterminable price elasticity.

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Definitions:

Physical Count

The process of counting and verifying actual inventory on hand to ensure accuracy in records and reports.

Inventory Reporting

The process of accounting for inventory levels, costs, and valuation in financial statements.

Dollar-Value LIFO

An inventory valuation method that uses the last-in, first-out (LIFO) principle, but adjusts for changes in the value of money, typically through the use of a price index.

Cost Index

An index that measures the change in cost of a specific basket of goods and services over time.