George Gnat Subscribes to a Monthly Pest Control Service for His

question 119

Multiple Choice

George Gnat subscribes to a monthly pest control service for his home.Last week the owner of the service informed George that he will have to raise his monthly service fee because of increases in the price of gasoline used by his workers on their service trips.How is the market for pest control services affected by this?

• A)There is an increase in the supply of pest control services.
• B)There is a decrease in the demand for pest control services.
• C)There is a decrease in the quantity supplied of pest control services.
• D)There is a decrease in the supply of pest control services.

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Definitions:

Salvage Value

The forecasted sell-on value of an asset at the conclusion of its operational period.

Double-Declining Balance

A method of accelerated depreciation where an asset loses value at double the rate of the traditional straight-line depreciation method.

Straight-Line

A method of calculating depreciation or amortization by evenly allocating the cost of an asset over its expected useful life.

Sum-Of-Years' Digits

An accelerated method of depreciation which involves allocating the cost of an asset over its useful life in a way that results in higher depreciation expense in the earlier years and lower expense in later years.