Suppose that gasoline prices increase dramatically this month. lola commutes 100 miles to work each weekday. over the next few months, lola drives less on the weekends to try to save money. within the year, she sells her home and purchases one only 10 miles from her place of employment. these examples illustrate the importance of a) the availability of substitutes in determining the price elasticity of demand. b) a necessity versus a luxury in determining the price elasticity of demand. c) the definition of a market in determining the price elasticity of demand. d) the time horizon in determining the price elasticity of demand.

Powell company began the 2018 accounting period with $40,000 cash, $86,000 inventory, $60,000 common stock, and $66,000 retained earnings. during 2018, powell experienced the following events: sold merchandise costing $58,000 for $99,500 on account to prentise furniture store. delivered the goods to prentise under terms fob destination. freight costs were $900 cash. received returned goods from prentise. the goods cost powell $4,000 and were sold to prentise for $5,900. granted prentise a $3,000 allowance for damaged goods that prentise agreed to keep. collected partial payment of $81,000 cash from accounts receivable. required record the events in a statements model shown below. prepare an income statement, a balance sheet, and a statement of cash flows. why would prentise agree to keep the damaged goods?