A Net Income Will Result If Gross Profit Is Greater

question 78

Multiple Choice

A net income will result if gross profit is greater than

• A) purchases.
• B) cost of goods available for sale.
• C) cost of goods sold.
• D) operating expenses.
• E) ending inventory.

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Definitions:

Cross Elasticity

A measure of how the demand for one good responds to a change in the price of another good.

Normal Good

A good for which demand increases as the income of consumers increases, and falls when consumer income decreases.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price in a specified time period.

Income Elasticity

A measure that quantifies the responsiveness of the demand for a good or service to a change in income of the people demanding the good.