If a Non-Renewable Resource Is Scarce,has Constant Marginal Cost of Production

question 19

Multiple Choice

If a non-renewable resource is scarce,has constant marginal cost of production and is sold in a competitive market,

• A) its price will increase over time.
• B) its price will exceed marginal cost.
• C) its price will increase by the rate of interest.
• D) All of the above.

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Definitions:

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.

Inventory Costs

The costs associated with purchasing, managing, and storing inventory until it is sold or used in production.