The use of a "replacement cost" definition of "market" is based on the assumption that
A)a decline in an item's replacement cost results in a decline in its selling price.
B)prices will fall in the same proportion as input costs fall.
C)replacement cost is appropriate for all situations.
D)using "net realizable value less a normal profit margin" will arbitrarily shift profits from one
Period to another.

Question

Quizplus · Accepted Answer

A decline in an item's replacement cost is assumed to lead to a decline in its selling price, as replacement cost reflects the current cost to replace an item, influencing its market value.

The Use of a "Replacement Cost" Definition of "Market" Is