If a Business Entity Sets the Price of Its Services

question 1

Multiple Choice

If a business entity sets the price of its services higher than competitors,it is likely that

• A) Asset turnover will be higher than expected
• B) Inventory turnover will be faster than expected
• C) Gross margin will be higher than expected
• D) Collection period will be longer than expected

---

Definitions:

Inflation

A general increase in prices and fall in the purchasing value of money.

Output

The total amount of goods or services produced by a company or economy in a certain period.

Inflation Rate

The rate at which the general level of prices for goods and services is rising, thereby eroding purchasing power.

Reducing Inflation

Measures and policies implemented to decrease the rate at which the general level of prices for goods and services is rising.