A Demand Curve That Is Horizontal Is Perfectly Elastic and the Elasticity

question 60

True/False

A demand curve that is horizontal is perfectly elastic and the elasticity is equal to one.

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Definitions:

FIFO

"First In, First Out," an inventory valuation method where goods purchased or produced first are the first ones to be sold or used.

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated by adding new purchases to beginning inventory and subtracting the cost of goods sold.

Periodic Inventory System

A periodic inventory system is a method of inventory valuation in which inventory is physically counted at the end of a specific period to determine the cost of goods sold and ending inventory.

Average Cost Method

An inventory costing method wherein the cost of goods sold and remaining inventory is valued at the average cost of all inventory items purchased during a period.