If the Demand for Agricultural Products Is Price Inelastic and the Supply

question 57

Multiple Choice

If the demand for agricultural products is price inelastic and the supply is dependent upon weather conditions,then

• A)price changes are likely to be small,and farm revenues are likely to be highly volatile.
• B)price changes are likely to be large,and farm revenues are likely to be highly volatile.
• C)prices are likely to be constant,and farm revenues are likely to be constant.
• D)prices are likely to be constant,and farm revenues are likely to be highly volatile.
• E)price changes are likely to be small,and farm revenues are likely to be constant.

---

Definitions:

Perpetual Inventory

An inventory system that updates the quantity and value of inventory after each transaction or event.

Interim Financial Statements

Financial reports covering a period of less than one year, often used to provide a more immediate view of a company's financial health.

Cost Flow Assumption

Refers to the method used by companies to value and manage inventory; common examples include FIFO (First In, First Out), LIFO (Last In, First Out), and average cost.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set.