"Inventory Profits" Are Most Likely to Occur in an Inflationary

question 86

Multiple Choice

"Inventory profits" are most likely to occur in an inflationary economy under which of the following inventory cost assumptions?

• A) Weighted average
• B) Specific item
• C) FIFO
• D) Lower of cost or market

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Definitions:

Output Tax

A tax levied on the quantity of production or output generated by a company, as opposed to income or profit.

Perfectly Elastic

An economic term describing a situation where the quantity demanded or supplied changes infinitely in response to any change in price.

Increasing-Cost Industry

Industry whose long-run supply curve is upward sloping.

Output Tax

A tax levied on the production or output of goods and services, often implemented to regulate or diminish the production of certain products.