The Costs Associated with Changing Prices in Times of Inflation

question 32

Multiple Choice

The costs associated with changing prices in times of inflation are called:

• A)inflation risk.
• B)price staggering.
• C)transaction costs.
• D)shoe-leather costs.
• E)menu costs.

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Definitions:

Purchased Lots

Refers to parcels or quantities of goods acquired by a company, often used in reference to real estate or bulk purchases of inventory.

Relevant Cost

Costs that will be affected by a decision and will have an impact on the future.

Variable Production Cost

Charges that fluctuate in line with production levels, such as direct labor and materials used.

Split-off

A point in the production process where multiple products are derived from a common input, and separate paths of further processing or sale are identified.