Suppose You Manage a Grocery Store

question 186

Multiple Choice

Suppose you manage a grocery store.If peanut butter is an inferior good,what do you suppose would happen to the price and quantity sold of peanut butter as incomes fell during a recession?

• A) The price would increase and the quantity would decrease.
• B) The price and quantity would both increase.
• C) The price and quantity would both decrease.
• D) The price would decrease and the quantity would increase.

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Definitions:

Title To Merchandise

The legal right or ownership of goods and products, which is transferred from the seller to the buyer when the conditions of a sale are met.

Report Form

A form of balance sheet with the “Liabilities” and “Stockholders’ equity” sections presented below the “Assets” section.

Balance Sheet

A financial statement that displays a company’s assets, liabilities, and shareholders' equity at a specific point in time.

Multiple-Step Income Statement

An income statement that separates operating revenues and expenses from non-operating items to calculate net income in several steps.