Studies Indicate That the Demand for Fresh Tomatoes Is Much

question 76

Multiple Choice

Studies indicate that the demand for fresh tomatoes is much more elastic than the demand for salt. These findings reflect that

• A) tomatoes are a necessity while salt is a luxury.
• B) it takes longer for consumers to adjust to a change in the price of salt than to a change in the price of tomatoes.
• C) salt will not spoil as easily as fresh tomatoes.
• D) more good substitutes exist for fresh tomatoes than for salt.

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Definitions:

Operating Activity

Transactions related to the primary activities of a business, such as purchasing inventory, selling goods or services, and paying salaries.

Financing Activity

Transactions related to raising or repaying capital, such as issuing stocks or borrowing loans.

Statement of Cash Flows

An accounting statement reflecting how shifts in balance sheet entries and earnings affect cash and cash equivalents, separated into areas of operating, investing, and financing.

Operating Activity

Activities directly related to the primary operations of a company, generating the main source of revenue and expenses.