If an Increase in the Price of Oil by 10

question 13

Multiple Choice

If an increase in the price of oil by 10 percent would cause the quantity demanded for oil to fall by 5 percent, the elasticity of demand for oil in absolute terms is:

• A) 10.
• B) 5.
• C) 2.
• D) 0.5.

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Definitions:

Net Realizable Value

The estimated selling price in the ordinary course of business, minus the estimated costs necessary to make the sale.

Inventory Purposes

The reasons for keeping stock of goods in a business, typically for sale, production, or avoiding stockouts.

Direct Costs

Expenses that can be directly traced to a product or service, such as materials and labor.

Inventory Costing Methods

Refers to the techniques used to determine the value of an inventory, including LIFO (Last In, First Out), FIFO (First In, First Out), and weighted average methods.