A Given Percentage Increase in Consumer Demand Can Lead to a Much

question 68

Multiple Choice

A given percentage increase in consumer demand can lead to a much larger percentage increase in the demand for plant and equipment necessary to produce the additional output.Economists refer to this as the ________.

• A) derived demand
• B) inelastic demand
• C) acceleration effect
• D) straight rebuy
• E) sales cycle

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Definitions:

Disrupted Production

Interruptions in the normal flow of manufacturing processes due to unforeseen events, leading to delays and potential financial losses.

Lost Sales

The potential revenue that a company misses out on due to being out of stock, having insufficient capacity, or other reasons for not fulfilling customer demand.

Quantity Discounts

Price reductions applied to bulk purchases, incentivizing buyers to increase the volume of their purchase.

Annual Carrying Costs

The total expenses associated with holding or storing inventory over a year, including costs related to storage, insurance, and obsolescence.