Alice Says That She Would Buy One Banana Split a Day

question 50

Multiple Choice

Alice says that she would buy one banana split a day regardless of the price.If she is telling the truth,

• A) Alice's demand for banana splits is perfectly inelastic.
• B) Alice's price elasticity of demand for banana splits is 1.
• C) Alice's income elasticity of demand for banana splits is 0.
• D) None of the above answers is correct.

---

Definitions:

Cycle Counting

An approach to stock audit where a limited selection of the inventory at a defined site is enumerated on a chosen date.

Service Level

A measure of the performance of a service system, often defined in terms of responsiveness to customer needs and reliability.

Ordering Costs

The expenses associated with the process of requisitioning, purchasing, and receiving goods and services; includes costs of paperwork, communication, and inspections.

Maintaining Inventory

Activities and strategies involved in keeping an appropriate level of stock to meet demand without incurring excessive holding costs or stockouts.