If C = 2000

question 12

Multiple Choice

If C = 2000 + .9YD,what decrease in taxes must occur for equilibrium output to increase by 1000?

• A)111
• B)100
• C)1000
• D)500

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Definitions:

Cost-to-Retail Ratio

A method used in retail to calculate the cost of goods sold based on the ratio of the cost of goods available for sale to the retail price of the goods.

Retail Inventory Method

An accounting method used by retailers to estimate inventory levels by incorporating the cost to retail price ratio.

Sales Discounts

Reductions in the price of goods or services offered to customers, typically as an incentive to encourage prompt payment.

Ending Inventory

The total value of goods available for sale at the end of an accounting period.