Table 31.3.1 Canada's Market for Widgets

question 49

Multiple Choice

Table 31.3.1
Canada's Market for Widgets

-Table 31.3.1 shows the Canadian supply of and demand for widgets. Widgets are available on the world market for $7. Canadian widget producers convince the government to protect the domestic industry from cheap imports. If the Canadian government sets an import quota of 8 million widgets, the resulting price of a widget in Canada will be ________, and domestic production will be ________.

• A)$6; 40 million
• B)$7; 36 million
• C)$8; 32 million
• D)$9; 28 million
• E)$10; 32 million

---

Definitions:

Purchased Units

The quantity of goods acquired by a company for resale or use in production during a specific accounting period.

Periodic FIFO

A method in inventory valuation where goods are assumed to be sold in the order they were acquired, calculated periodically.

Inventory Activity

This involves all movements or transactions related to inventory, including purchases, sales, returns, and write-offs, which affect the stock levels.

Beginning Inventory

The value of a company's inventory at the start of an accounting period, used to calculate cost of goods sold.