Just Before Valentine's Day, the Price of Roses Increases Dramatically

question 363

Multiple Choice

Just before Valentine's Day, the price of roses increases dramatically. This is because

• A) self-interested individuals try to charge more for a good than consumers are willing to pay.
• B) demand increases while the supply of roses remains relatively constant.
• C) the supply curve of roses is highly elastic.
• D) the demand for roses is relatively inelastic most of the year, but becomes more elastic as demand increases.

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Definitions:

Periodic Inventory System

An inventory system that updates inventory records and calculates cost of goods sold at the end of a reporting period, rather than continuously.

LIFO

Last In, First Out refers to an approach for evaluating inventory in which the items that were produced last are considered to be the first ones sold.

Weighted-Average Cost

A calculation used in inventory management and cost accounting that takes into account the varying costs of goods and determines an average cost for the goods sold.

Periodic Inventory System

An inventory system that updates inventory balances after a specific period, calculating COGS by a physical count.