When the Price of Used Cds Is $4,Daphne Buys Five

question 169

Multiple Choice

When the price of used cds is $4,Daphne buys five per month.When the price is $3,she buys nine per month.Daphne's demand for used cds is

• A) elastic, and her demand curve would be relatively flat.
• B) elastic, and her demand curve would be relatively steep.
• C) inelastic, and her demand curve would be relatively flat.
• D) inelastic, and her demand curve would be relatively steep.

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Definitions:

Tax Advantage

A tax advantage refers to the economic bonus that applies to certain investments or transactions that are favored by tax policy, allowing for a reduction in tax liabilities.

Lower of Cost

A principle that states inventory should be recorded at the lesser of its historical cost or the current market value, to ensure assets are not overstated.

IFRS

International Financial Reporting Standards, which are international accounting standards set by the International Accounting Standards Board to ensure transparency and comparability of financial statements worldwide.

Direct Costing

An accounting method that only considers variable costs as product costs, while fixed costs are treated as period expenses.