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Explain the Shifts in Demand And/or Supply That Can Result

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Essay

Explain the shifts in demand and/or supply that can result in the following observations: (Assume the demand curve is downward sloping and the supply curve is upward sloping.)
(a) Both price and quantity rise.
(b) Price rises, quantity falls.
(c) Price rises, quantity doesn't change.
(d) Quantity rises, price doesn't change.


Definitions:

Safety Capacity

Additional capacity reserved to ensure a system can meet unexpected demand spikes, thereby reducing the risk of service or product delivery failure.

Planning Horizon

The future period over which an organization forecasts its operations and plans its strategies.

Aggregate Plan

An approach to operational planning that seeks to balance demand and supply in a way that minimizes costs over a medium-term period, focusing on general output levels.

Aggregate Planning

A process by which a company determines levels of capacity, production, subcontracting, inventory, and stockouts to optimize costs against flexibility.

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