Which of These Is Not a Reason to Keep Inventory

question 8

Multiple Choice

Which of these is not a reason to keep inventory?

• A) Can reduce costs by buying in bulk
• B) Can increase dependability by having a constant supply
• C) Can become obsolete if not ordered
• D) Can increase flexibility to cover short term demands

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Definitions:

Equilibrium Price

The price at which the quantity of goods supplied is equal to the quantity of goods demanded in a market.

Quantity Demanded

The total amount of goods or services that consumers are willing and able to purchase at a given price level.

Demand

The amount of a particular good or service that consumers are willing and able to purchase at various prices during a certain period of time.

Midpoint Formula

A more precise way of calculating percentages using the value halfway between P1 and P2 for the base in calculating the percentage change in price and the value halfway between Q1 and Q2 as the base for calculating the percentage change in quantity demanded.