You Notice That the Price of Apple Juice at Your

question 140

Multiple Choice

You notice that the price of apple juice at your local grocery store has increased. Which of the following is NOT a possible explanation for the rise in the price of apple juice?

• A) A recent scientific study is reported in the press that suggests that apple juice may be contaminated with pesticides.
• B) Frosty weather destroys apples, causing the price of apples to increase.
• C) Due to the bioengineering of apple trees, the domestic supply of apples increases.
• D) As a result of an increase in income, consumers wish to purchase more apple juice at every price level.

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Definitions:

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including both materials and labor expenses.

Inventory

Items held by a company for sale in the ordinary course of business or to be used in the production of goods sold.

Contra-Revenue Accounts

Accounts used to record reductions in gross revenue, such as sales returns, allowances, and discounts, to arrive at net revenue.

Gross Profit

The financial metric calculated by subtracting the cost of goods sold from total sales revenue, representing the efficiency of a company in managing its production and sales.