The Inventories as a Factor of Production Motive for Holding

question 44

Multiple Choice

The inventories as a factor of production motive for holding inventories suggests that:

• A)firms hold inventories in order to produce more output.
• B)when sales are low, firms produce more than they sell and put the extra goods in inventories.
• C)firms hold inventories to avoid losing sales.
• D)when a product is only partly completed, its components are counted as part of the firm's inventory.