Flour Is the Main Input in the Production of Bread

question 277

Multiple Choice

Flour is the main input in the production of bread. All else equal, if the price of flour decreases, what would we expect?

• A) the supply of bread to decrease
• B) the demand for bread to decrease
• C) the supply of bread to increase
• D) the demand for bread to increase

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Definitions:

Safety Inventories

Stocks of products or materials kept on hand to protect against uncertainties in supply or demand.

Annual Holding Cost

The total cost incurred by holding inventory over a year, including storage, insurance, and opportunity costs.

UPS

United Parcel Service, a global shipping and logistics company known for its brown delivery trucks and comprehensive tracking system.

FedEx

A US-based global delivery services corporation recognized for its rapid overnight delivery capabilities and for developing a tracking system that offers immediate updates on the whereabouts of packages.