The Cross Elasticity of Demand Is a Measure of How

question 41

Multiple Choice

The cross elasticity of demand is a measure of how

• A) responsive consumers are to changes in the price of a product.
• B) responsive suppliers are to changes in the price of a product.
• C) demand for a product changes when the price of a substitute or complement changes.
• D) total revenue changes when the price of a product changes.
• E) demand for a product changes when income changes.

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Definitions:

Cost of merchandise sold

The total cost of acquiring or manufacturing the products that were sold to customers during a period.

Perpetual system

An inventory accounting system that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

FIFO

An accounting method used to manage inventory and cost of goods sold where the first items produced or acquired are the first to be sold.

Merchandise sold cost

The total expense incurred to produce or purchase the goods that have been sold to customers.