If the Contribution to Output of an Additional Unit of the Variable

question 21

Multiple Choice

If the contribution to output of an additional unit of the variable input exceeds the average contribution of the variable inputs used,

• A)the average contribution must rise.
• B)the average contribution must fall.
• C)the total product will begin to decline.
• D)the average product will be at its minimum.

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Definitions:

Trade-Offs

The balancing of factors or outcomes in decision-making, where improving one aspect may result in compromising another.

Ordering Policies

Rules or guidelines that dictate how and when to place orders for materials or products, often aiming to minimize costs and meet demand.

Safety Inventory

Extra stock that is kept to mitigate the risk of stockouts caused by demand and supply variability.

Impact

The effect or influence of one factor on another or on the outcome of a situation.