A Worldwide Hops (A Flowers Used in Brewing) Shortage Made

question 345

Multiple Choice

A worldwide hops (a flowers used in brewing) shortage made stouts, ales and other specialty microbrews more pricy in 2008. Gayle Goshie, a hops farmer, blamed overproduction for hops' previously cheap place on the agricultural market. The glut pushed many hop farmers out business, which gradually helped hop prices recover. Suppose farming hops is a perfectly competitive market. Why would some hop farmers go out of business?

• A) because the price of hops was below the minimum of average fixed cost
• B) because the price of hops was lower than the minimum of average variable cost
• C) because the price of hops was higher than the minimum of average variable cost
• D) because the price of hops was lower than the minimum of average total cost

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Definitions:

Replenishment

The process of refilling inventory or stock to ensure adequate levels for ongoing operations or sales demands.

Journal Entry

An accounting record of a business transaction in the accounting books, including information such as the date of the transaction, amounts, accounts affected, and a brief description.

Petty Cash

A small amount of cash on hand used for minor expenses.

Merchandise Inventory

Refers to the goods a company has on hand for the purpose of resale to customers in the normal course of business.