For a Given Firm, Holding Other Factors Constant, Ordering Costs

question 43

Multiple Choice

For a given firm, holding other factors constant, ordering costs per unit generally

• A) decline as average inventory increases.
• B) increase in proportion to increases in inventory.
• C) are considered fixed costs.
• D) are negotiated.

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Definitions:

Elasticity of Demand

An indicator of the responsiveness of the quantity of a good demanded to its price alterations, showing how sensitive buyers are to changes in its cost.

Tax Burden

The total amount of taxes paid by individuals or businesses relative to their income, often discussed in the context of debates over fairness and economic policy.

Elastic

Describes a situation in which the demand or supply for a good or service changes significantly when its price changes.

Inelastic

A situation in which the demand or supply for a product does not change significantly in response to price changes.