The Discovery of a New Hybrid Wheat Would Increase the Supply

question 289

Multiple Choice

The discovery of a new hybrid wheat would increase the supply of wheat. As a result, wheat farmers would realize an increase in total revenue if the

• A) supply of wheat is elastic.
• B) supply of wheat is inelastic.
• C) demand for wheat is inelastic.
• D) demand for wheat is elastid.

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Definitions:

Retail Inventory Method

An accounting process used by retailers to estimate inventory value by converting the retail value of inventory to a cost basis, based on the relationship between cost and retail price.

Ending Inventory

The value of goods available for sale at the end of an accounting period.

Gross Profit Method

A method of estimating the amount of ending inventory by applying the gross profit percentage to sales.

Inventory Shortage

The situation where the actual inventory on hand is less than what is recorded in the accounting records.