Which of the Following Causes a Decrease in Demand for a Normal

question 418

Multiple Choice

Which of the following causes a decrease in demand for a normal good?

• A) Increase in price of a substitute
• B) Increase in price of a complement
• C) Increase in price
• D) Increase in income

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Definitions:

Periodic Inventory System

An inventory system that updates inventory balances and cost of goods sold at the end of an accounting period based on a physical count.

FIFO

An accounting method for valuing inventory that assumes the first items produced or bought are the first ones sold, standing for First In, First Out.

Weighted-Average Cost Method

An inventory costing method that assigns the average cost of goods available for sale to both ending inventory and cost of goods sold, weighted by the quantity of goods.

LIFO

Last In, First Out is a method of valuing inventory where the items that were most recently produced or purchased are the first ones to be used in the calculation of cost of goods sold.