(Figure: Total Cost and Quantity of Output VI) Answer the Following

question 74

Multiple Choice

(Figure: Total Cost and Quantity of Output VI) Answer the following question.
At an output level of 2, the total cost is $____.

• A) 5
• B) 2.5
• C) 2
• D) 1

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Definitions:

Carrying Costs

Expenses associated with holding or maintaining an asset over time, such as storage, insurance, and taxes for physical goods.

Reorder Point

The level of inventory which triggers an action to replenish that particular inventory stock.

Inventory Order

The process of ordering additional products or materials to replenish stock levels in anticipation of demand or to maintain inventory at desired levels.

Economic Order Point

The ideal quantity of inventory a company should order to minimize costs, including holding and shortage costs.