Which One of the Following Would Cause a Decrease in the Cost

question 101

Multiple Choice

Which one of the following would cause a decrease in the cost ratio as used in the retail inventory method?

• A) Higher retail prices
• B) Lower net markups
• C) More employee discounts given
• D) Higher freight-in charges

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Definitions:

Normal Good

A good for which demand increases as the income of the consumer increases, showing a positive relationship between income and demand.

Income Effect

The impact of income fluctuations on an individual or an economy on the quantity of goods or services that is demanded.

Price Decreases

A reduction in the cost at which goods and services are sold, making them more affordable to consumers.

Freelance Journalist

A self-employed reporter or writer who sells stories or articles to media outlets without being permanently attached to any one employer.