Which of the Following Is Correct for a Firm That

question 58

Multiple Choice

Which of the following is correct for a firm that places orders for an item in amounts greater than the economic order quantity?

• A)the marginal reduction in order cost exceeds the marginal carrying cost per item
• B)the marginal carrying cost per item exceeds the marginal reduction in order cost
• C)total order costs exceed total carrying costs
• D)total cost of ordering and carrying has been maximized

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