How Does Carrying Inventories Contribute to Economies of Scale

question 13

Multiple Choice

How does carrying inventories contribute to economies of scale?

• A)Increases the interest on the expenses to produce the inventory
• B)Inventory depreciates in value while waiting to be used or sold
• C)Increases the storage facilities necessary
• D)Increases competition with rivals for customers
• E)Minimizes the chance of stock-out

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Definitions:

Price-Fixing

An agreement among competitors to raise, fix, or otherwise maintain the price at which their goods or services are sold, which is illegal under antitrust law.

Sherman Act

A landmark antitrust law passed in 1890 in the United States, designed to promote market competition by prohibiting monopolies, cartels, and other forms of anticompetitive conduct.

Criminally Convicted

Being criminally convicted means that an individual has been found guilty of a crime by a court of law, following a formal trial or plea agreement.

Violating

The action of violating or not adhering to a regulation, pact, or statute.