Heedy Company Is Trying to Decide How Many Units of Merchandise

question 100

Multiple Choice

Heedy Company is trying to decide how many units of merchandise to produce each month.The company policy is to have 20% of the next month's sales in inventory at the end of each month.Projected sales for August,September,and October are 30,000 units,20,000 units,and 40,000 units,respectively.How many units must be produced in September?

• A) 24,000
• B) 18,000
• C) 28,000
• D) 22,000

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Definitions:

Price Elasticity

A measure of how much the quantity demanded or supplied of a good changes in response to a change in its price, indicating the sensitivity of demand or supply to price changes.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price, holding all other factors constant.

Inelastic

Refers to a scenario in which a change in price leads to a comparatively small change in the quantity demanded or supplied.

Price Elasticity

An indicator of the sensitivity of the demand for a product to alterations in its price.