If the Income Elasticity of Demand for a Good Is

question 88

Multiple Choice

If the income elasticity of demand for a good is - 3.4,a 25% increase in income results in

• A)a 4% increase in quantity demanded.
• B)a 0.85% increase in quantity demanded.
• C)an 8.5% decrease in quantity demanded.
• D)an 85% decrease in the quantity demanded.
• E)There is not enough information to answer this question.

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Definitions:

Goods On Consignment

Items that are held by a seller but still owned by the supplier until sold, at which point the supplier receives payment minus a commission.

Resalable

Resalable refers to goods or products that can be sold again, either in their original condition or after being refurbished or repurposed.

Principle of Consistency

An accounting principle that necessitates the use of the same accounting methods and practices from one period to the next for comparability.

Inventory Valuation Method

A system or approach used to calculate the ending inventory's cost and determine the cost of goods sold, affecting the company's profitability and inventory balance.