Exhibit 3-4 -When Both Supply and Demand Shift Right at the Same

question 41

Multiple Choice

Exhibit 3-4
-When both supply and demand shift right at the same time,

• A)the change in equilibrium price cannot be predicted, but the change in equilibrium quantity can be predicted.
• B)the change in both equilibrium price and equilibrium quantity can be predicted.
• C)the change in equilibrium price can be predicted, but the change in equilibrium quantity cannot be predicted.
• D)neither the change in equilibrium price nor equilibrium quantity can be predicted.
• E)either the equilibrium price or equilibrium quantity will change, but not both.

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Definitions:

MRP Logic

The set of principles and calculations used in Material Requirements Planning, aimed at ensuring the right materials are available for production at the right time.

Lot-For-Lot

An inventory management ordering policy where the order quantity is made exactly equal to the demand for the upcoming period.

Economical

Characterized by efficiency and avoidance of waste, in terms of both cost and resources.

Successful MRP Use

Refers to the effective application of Material Requirements Planning, a system for planning production and inventory control, to ensure timely availability of materials while minimizing inventory costs.