Exhibit 14-3

question 56

Multiple Choice

Exhibit 14-3.Consider the following sample regression equation ,where y is the demand for Product A (in 1000s) and x is the price of the product (in $) . Refer to Exhibit 14-3.The slope coefficient indicates that if

• A)the price of Product A increases by $1,then on average,demand decreases by 20.
• B)the price of Product A increases by $1,then on average,demand increases by 20.
• C)the price of Product A increases by $1,then on average,demand decreases by 20000.
• D)the price of Product A increases by $1,then on average,demand increases by 20000.

---

Definitions:

Market Method

A valuation method used to determine the fair value of assets and liabilities, based on their selling prices in active markets.

LIFO

Last-In, First-Out, an inventory valuation method where the most recently acquired items are recorded as sold first.

Retail Inventory Method

An accounting method used to estimate inventory cost for retail businesses by applying a constant gross margin percentage.

Gross Profit Ratio

A financial metric that measures a company's gross profit as a percentage of its revenues, indicating efficiency in using labor and supplies.