If Price of a Good Rises, What Happens to the Demand

question 134

Multiple Choice

If price of a good rises, what happens to the demand for that good, all other things held constant?

• A)The demand increases.
• B)The demand decreases.
• C)The demand does not change.
• D)The outcome depends upon the supply of the good.

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Definitions:

Cost Of Goods Sold

An accounting term referring to the direct costs attributable to the production of the goods sold by a company.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, becoming the next period's beginning inventory.

Periodic Inventory System

An inventory accounting system where updates to inventory levels are made at specific intervals, such as monthly or annually, rather than continuously.

FIFO

"First In, First Out," an inventory valuation method assuming that the oldest items in inventory are sold or used first.