Use the Following to Answer Questions

question 29

Multiple Choice

Use the following to answer questions :
Figure 3-3
-Assume that automotive workers go on strike, so that the production of cars falls.Given the supply and demand curves in Figure 3-3, which of the following would result in comparison to the initial equilibrium position?

• A)Prices fall, Quantity falls
• B)Prices rise, Quantity falls
• C)Prices rise, Quantity rises
• D)Prices and Quantity do not change.
• E)None of the above.

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Definitions:

Safety Stock

Additional inventory held by a company to prevent stockouts, typically used as a buffer against variability in demand or supply.

Replacement Order

This refers to the process of ordering new or additional equipment or parts to replace old or used ones in order to maintain operational efficiency.

Inventory Level

The quantity of goods or materials that a company holds at a given time, used to meet demand or production needs.

Derived Demand

The demand for a resource that results from the demand for the goods and services that the resource produces.