Explain Why There Is a Direct Relationship Between Price and Quantity

question 413

Essay

Explain why there is a direct relationship between price and quantity supplied.

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Definitions:

Gross Profit Method

An accounting technique used to estimate inventory levels and cost of goods sold by applying a consistent gross profit percentage to sales figures.

Retail Method

An inventory accounting method used in retail, estimating the ending inventory value based on the relationship between cost and retail price.

Weighted-Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the average cost of all units available.

LIFO

"Last In, First Out," an inventory valuation method where the last items placed in inventory are the first ones sold.