AICPA Exam CPA-Business Topic 3 Question 97 Discussion

Actual exam question for AICPA's CPA-Business exam

Question #: 97
Topic #: 3

[All CPA-Business Questions]

Long Lake Golf Course has raised green fees to a nine-hole game due to an increase in demand.

Which of the following is correct?

AThe regular weekday and weekend demand is inelastic.

BThe regular weekday and weekend demand is elastic.

CThe senior citizen and weekend demand is inelastic.

DThe senior citizen demand is elastic and weekend demand is inelastic.

Show Suggested Answer

Suggested Answer: D

Choice 'd' is correct. Inspections. Inspections are part of order costs, not carrying costs.

Choices 'a' and 'c' are incorrect. Inventory carrying costs include all costs associated with warehousing (storing) inventory (e.g., storage, insurance, obsolescence, and spoilage associated with holding inventory).

Choice 'b' is incorrect. The economic cost of holding inventory includes the implicit (opportunity) cost of foregoing a return on the money invested in inventory.

by Marlon at Sep 13, 2024, 02:24 PM

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Fabiola

2 months ago

I'm going with D. It makes sense that the senior citizens would have a more inelastic demand since they may be on fixed incomes, while the weekend golfers have more flexibility in their schedules.

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Mozell

9 days ago

Yeah, that makes sense. Senior citizens might be more willing to pay higher fees to play at their preferred times.

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Peggie

10 days ago

I think you're right, senior citizens are probably less likely to change their golfing habits compared to weekend golfers.

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Rozella

1 months ago

I agree with you, D seems like the most logical choice.

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Art

2 months ago

Ha! Looks like the golf course is trying to squeeze more money out of the players. I bet the senior citizens are not happy about the fee hike.

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Dell

25 days ago

D) The senior citizen demand is elastic and weekend demand is inelastic.

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Stefania

1 months ago

C) The senior citizen and weekend demand is inelastic.

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Deeanna

1 months ago

B) The regular weekday and weekend demand is elastic.

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Candida

2 months ago

A) The regular weekday and weekend demand is inelastic.

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Abel

2 months ago

That's an interesting point. Maybe the increase in green fees will affect different groups differently.

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Ettie

2 months ago

Hmm, I'm not sure. The question is a bit confusing. Maybe the senior citizens' demand is inelastic, but the weekend demand is elastic? I'll have to think about this one.

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Leonie

1 months ago

Hmm, I think you might be right. The weekend demand could be elastic.

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Tula

1 months ago

A) The regular weekday and weekend demand is inelastic.

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Lucille

2 months ago

I disagree, I believe the demand for senior citizen and weekend games is inelastic.

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Christiane

2 months ago

I think the answer is B. If the demand is inelastic, raising the green fees would not have increased revenue. The fact that they were able to raise the fees suggests the demand is elastic.

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Abel

2 months ago

I think the demand for regular weekday and weekend games is elastic.

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