For a Particular Good,a 5 Percent Increase in Price Causes

question 159

Multiple Choice

For a particular good,a 5 percent increase in price causes a 15 percent decrease in quantity demanded.Which of the following statements is most likely applicable to this good?

• A)There are many substitutes for this good.
• B)The good is a necessity.
• C)The market for the good is broadly defined.
• D)The relevant time horizon is short.

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Definitions:

Method Of Cost Formula

The Method of Cost Formula refers to an accounting approach used to determine the value of inventory sold and remaining in stock, such as FIFO (First-In, First-Out), LIFO (Last-In, First-Out), and Average Cost Method.

Physical Inventory Count

A physical inventory count is the manual process of counting all the goods a company physically has on hand at a specific time to verify stock records and values.

First-In, First-Out

An inventory valuation method where the goods first produced or acquired are sold or used first, presuming that the oldest inventory items are consumed before newer ones.

Ending Inventory

The value of goods available for sale at the end of an accounting period, after purchases and sales have been accounted for.