What Are Anticipation Inventories and Why Are They Used

question 13

Essay

What are anticipation inventories and why are they used?

---

Definitions:

Normal Good

A good for which demand increases as the income of consumers increases and decreases as the income of consumers decreases.

Inferior

A term used in economics to describe goods whose demand decreases as the income of the consumer increases, contrasted with normal goods.

Input Costs

Input costs are the prices of the raw materials, labor, and other resources required to produce a good or service.

Price Change

A variation in the cost of a good or service over time.