Which of the Following Is Not a Traditional Reason for Carrying

question 7

Multiple Choice

Which of the following is not a traditional reason for carrying inventory?

• A) to satisfy customer demand
• B) to avoid shutting down manufacturing facilities
• C) to buffer against unreliable production processes
• D) to hedge against future price increases
• E) all of these are traditional reasons for carrying inventory

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Definitions:

Patents

Legal documents granting an inventor exclusive rights to produce, use, and sell an invention for a certain number of years.

Research And Development

A business or government activity that involves the study and creation of new products, services, or discoveries.

LRAC Curve

Long-Run Average Cost Curve, showing the lowest average cost at which a firm can produce any given level of output in the long term.

Natural Monopolist

A type of monopoly that occurs when a single firm can supply a product or service to an entire market at a lower cost than two or more firms could.