The Following Graph Shows the Demand and Supply Curves of a Resource

question 123

Multiple Choice

The following graph shows the demand and supply curves of a resource. The opportunity cost of the resource in equilibrium equals _____. Figure 11.4

• A)$0
• B)$120
• C)$1,000
• D)$300
• E)$1,300

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Definitions:

FIFO Method

"First In, First Out," an inventory valuation method where goods produced or acquired first are sold, used, or disposed of first.

Periodic System

An inventory system that updates inventory and cost of goods sold only at the end of the accounting period based on a physical count.

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated by adding purchases to beginning inventory and then subtracting the cost of goods sold.

Gross Profit

The difference between sales and the cost of goods sold before deducting overhead, payroll, taxation, and interest payments.